Interview with a Local Property Broker

With: Ana Claudia
From: Terra Verde
Experience: Local Property Broker dealings with both local  and international buyers since 2000.
Where: Capim Macio, Ponta Negra, Tabatinga
When: Thursday 27th September 2012 1) What is your current view of the housing market? The international market is warming up and starting to get better as overseas buyers are recovering from the crisis of a few years ago The problem with the metropolitan area of Natal is that there is very little development land available. Developers are looking to Planalto for land and are even looking further out of the Metropolitan area into the countryside to develop. We will be amazed in the next decade Government is taking federal schools to countryside, 20 years ago there was no formal education at all in the countryside and now there is and it is being improved and developed. 2) Do you believe there is a property price bubble, or risk of one? No bubble you have to consider each area of Natal as itself rather than Natal as one market. 3) With all the construction going on, do you think there is risk of an oversupply of property? If so in which sector / at which price range? There is a risk of oversupply at the moment. Population growth has decreased. No over supply in Petropolis, Lagoa Nova, Capim Macio areas 4) What are the main challenges for agents/developers in the market? Real challenge is bank finance, the time it takes to process applications, it takes lots of work. Buyers access to finance is not a problem but Caixa Economica has so many applications to approve there is a large backlog. However there is a plan to speed this up. Caixa economica called us to be the finance approval agent for some projects, we now have an in house agency, preapproval training with select agencies to process mortgages faster. 5) What is the impact locally of global economic conditions? Does the man on the street feel this? Locally there is no real impact however Internationally the property market is now feeling the effect of the downturn in Europe, as there are less international buyers. 6) How easy is it now for locals to get bank financing (mortgages and other sources)? It is very easy for locals to get bank financing however locals now have to prove that they qualify, there are stricter criteria than in the past. 7) What is the split % of first homes and investments 70% of sales are first homes and 30% of sales are investments 8) What are locals buying for investment? Ah that is something I would like to know too! 9) Where do you see the biggest opportunity in the market? Big investors are buying land, the big business opportunity is Minha Casa Minha Vida land, metropolitan development plots in Gran Natal are in high demand 10) What do you think the impact of the FIFA World Cup and Olympics will be? For holiday homes prices will increase up to The World Cup and after prices will go down. “There is a big disbelief that The World Cup will actually happen; at least there is a big disbelief that the stadium will be finished on time”  
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Interview with a Brazilian Lawyer

With: Aricia 
From: Rio
Experience: 12 years Business Law in Natal
Where: Petropolis, Natal
When: Tuesday 24th September 2012

1) What is your current view of the housing market? The local market is bigger than the international market now. Sales and prices for Petropolis and Lagoa Nova properties continue to grow. 2) Do you believe there is a property price bubble, or risk of one? In 2006 property in Ponta Negra was priced very high but these have now readjusted to normal level. Petropolis and Tirol there is always demand and prices will continue to grow. 3) With all the construction going on, do you think there is risk of an oversupply of property? If so in which sector / at which price range? No I don´t think so, but there is a need for infrastructure improvements and development, the roads and transport are chaos now we have lots of traffic jams. 4) What is the impact locally of global economic conditions? Does the man on the street feel this? The man on the street is totally unaware of it. 5) How easy is it now for locals to get bank financing (mortgages and other sources)? Yes easy! Caixa is giving a lot. Mainly selling to Brazilians with finance. Private banks are not lending as the rates are not good. Caixa offers better rates and 100% finance in some cases. 6) What are locals buying for investment? Wealthy locals are buying beach houses for private use and as an investment. They get finance for the 1st house easily on long payment plans. For developers there is no more land available in central districts of Tirol & Petropolis so the solution is to approach house owners on plots and do permuta swap deals. 7) Where do you see the biggest opportunity in the market? If you have a good business come to Natal the south of Brazil is swamped. The services industry in Natal is poor and people will pay for better service, it is not uncommon for people to argue with clients and customers. 8) What do you think the impact of the FIFA World Cup and Olympics will be? FIFA World Cup will be chaos unless they get the roads sorted in time however it will be good for some businesses.
The FIFA World Cup impact is most down to the infrastructure. Natal will be a better city after the games thanks to the New Stadium and New airport.
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Interview with the Administrator of Alto Das Dunas

With: Cristiana 
Lives in: Lagoa Nova, Natal
From: Sao Paulo
Where: Tirol, Natal
When: Tuesday 24th September 2012 1) What is your current view of the housing market? Prices will continue to go up for the 8 years, apartments are a very good investment. 2) With all the construction going on, do you think there is risk of an oversupply of property? If so in which sector / at which price range? There is an oversupply in Nova Parnamirim however in Tirol, Petropolis and Lagoa Nova there is no oversupply, people really love to live here. 3) What are the main challenges for agents/developers in the market? The biggest challenge is to find a good plot in the right location at the right price. 4) How easy is it now for locals to get bank financing (mortgages and other sources)? Very easy Caixa Economica is lending to lots of people. 5) What is the split % of first homes and investments 80% of sales are for homes 20% are for investments. 6) What are locals buying for investment? People buy apartments which provide more security than houses. If you are looking to rent out a property and it is a house it maybe vacant for a bit which is a security risk whereas an empty apartment is not. In Parnamirim people are buying finished properties, in central Natal people are buying off plan apartments with mortgages from Caixa Economica. In Tirol and Petropolis buyers are generally pay cash. 7) Where do you see the biggest opportunity in the market? Renewable energy is a great opportunity for Brazil. 8) What do you think the impact of the FIFA World Cup and Olympics will be? The FIFA World Cup impact is most down to the infrastructure. Natal will be a better city after the games thanks to the New Stadium and New airport.
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Interview with Investment Consultant

With: John B
Lives: Capim Macio, Natal 
Experience:  5 years in Natal in construction and developing
Location: Sao Miguel Do Gostoso
Date: Saturday 29th September 2012 1) What is your current view of the housing market? It is all relative, I am comparing prices going up and down and stabilizing. At places like Petropolis, Tirol, Candelaria, Nova Parnamarim, Lago Nova, Capim Macio, the prices are significantly going up. The other thing to look at is the market segments because in the low income Minha Casa Minha Vida sector the price is still going up steadily not shooting up but going up steadily from year to year. Whereas the very high income sector has been negatively impacted by companies like Cirela & Rossi, massive companies from the south of Brazil who have come in and done mega developments in the second homes market with 100s of units and the prices just shot up due to speculation and those prices are now being corrected, this has affected property in the Ponta Negra area. Overall the middle class is still going up steadily but the higher end is being adjusted all around. 2) Do you believe there is a property price bubble, or risk of one? There have been 2 major price bubbles in Natal, the 1st was in Ponta Negra thanks to speculation from overseas investors. The prices went through the roof, double in a year or 2, which was not feasible to maintain and wasn´t maintained. There is a price bubble which was created recently by the likes of big southern developers like Rossi and Cirela who came in and again a lot of speculation a lot of price increases during construction and really out priced themselves and all the rest of the market, but generally speaking the developers which kept their head together like Capuche and Conisa, those that kept constructing good quality projects in good locations; Ecosil for example are all selling very well and I think part of their success is not being greedy. I think some people got greedy; the big companies that came up from Sao Paolo and Rio just thought they could charge Sao Paolo and Rio prices  whichwas unsustainable. 3) With all the construction going on, do you think there is risk of an oversupply of property?  If so in which sector/at which price range? In some neighbourhoods and markets yes. Petropolis so far sales have kept being strong and in Tirol, I don’t know of any which are empty not having sales. Candalaria and Lagoa Nova there not really that many developments going on. Capim Macio at the top end of the market there are expensive apartments, R$ 350,000 to R$400,000, that have been built and I don’t think all of them have been sold. So there in the top end of Capim Macio you might have a problem. The middle market I still think is fine and the low end is not really the Capim Macio market. For example if you look at the neighbourhood beginning Nova Parnamirim, there are a lot of developments going on for the low to medium market, so many developments and you don’t see all of them being sold, mainly because there is a lot on offer, there is a lot of demand but because there is so much on offer people can be very selective about what they buy so they tend to go for the nicer, bigger, better priced ones. On the road going towards the airport for example, just on that road from the BR101 when you come out of Roberto Friere to the airport you count the number of developments you have on that road , the number of towers, you´ve got Ecosil with 4 towers, 400 units maybe. 2 more towers on the left and 2 more on the right, up by Sun Towers you´ve got another 10 towers going up (they are not cheap either) medium to medium high market apartments more than R$200,000, I am a bit concerned about that area. 4) What is the impact locally of global economic conditions? Does the man on the street feel this? No. I haven’t seen any real significant change. I consider myself a man on the street and I can see it because I hear the news about it all the time and I have friends and also business wise I can see that there are less international buyers especially looking at holiday homes, that has affected our market quite a lot. But I don´t think I have ever heard anyone talking about the crisis in Europe and the USA, any of my Brazilian friends, nothing, they don´t mention it at all. 5) How easy is it now for locals to get bank financing (mortgages and other sources)? It really depends on the local. There are a lot of locals and a lot of the market do not have official incomes, so a huge part of the population has no official income which means that they of course can’t get any kind of bank financing. For the low income people it is easy. We have just done the launch of Park Village last year and we got 150 people and not many came back unapproved not everyone but not many, most of them got approved financing from Caixa. So the lower end can get financing quite easy because of the MCMV programme. The medium market, it is easy to get relatively but it is still very expensive, I know quite a few people who have got loans no problems. Our first mortgage company is starting to be set up in Natal now and we are actually handling mortgages as an independent company. You can’t get off plan mortgages only on existing completed properties or a plot with a house with title deed. 6) What is the split % of first homes and investments? At the wealthy top end of the market there are still lots of Brazlians buying holiday homes, even here in Sao Miguel Do Gostoso in Anton´s project Shamballa,  a lot of people that have bought plots are Brazilian. Time share type developments are also very popular with Brazilians. At the lower end of the market people are buying their first house as they don’t have houses, there is huge housing deficit. It is all very different depending on the market. 7) What is the % split in off plan vs. resales In Brazil there is still a lot of bartering you can trade in your old car for a bicycle and a fridge. Real estate here is also used as a trading chip. One broker I know gets a new car every month as when he sells a property he throws in his car as part of the deal, this sort of thing is quite common here. The medium income bracket buy off plan as an investment and then flip it over into something that is built, and upgrade to where they live into something new by swapping a plot with their house for a plot with a bigger house for example. The resale market here is not like the UK market. In natal people generally buy from developers due to the good financing deals on offer. They can buy a property that maybe finished in a year and have 10 years to pay it off. 8) What are locals buying for investment? A lot off plan again because they get very good payment terms and they buy off plan plots and apartments and houses, everything off plan. Finished – they tend to buy plots, landbanking or actual plots in gated developments. It depends again on the market we are talking about. The higher end of course invest in large plots for, land banking because they have probably got a couple of million lying around. It seems to be that any one with money in Natal, have all got land everywhere, I speak to my landlord, he is a Brazilian from Minas Gerais who has got plots all over the place and a house that I  rent from him and he has got apartments here and there and he has got plots, land-banking,  cement factories he has got loads of different types of investments. 10) Where do you see the biggest opportunity in the market? For an investor who has GBP 100,000? I did very well buying at Shamballa.  Off plan, buy something off plan or a plot at the right price from a reputable developer with a history of being able to deliver because a lot of companies have reputations of delivering late or not at all. Very few foreign developers have delivered what was promised. Most importantly do due diligence, with independent law firms. Just about everything in Brazil is an opportunity, not only real estate everything is an opportunity, every single business. You just have to chose the right one and importantly the right people to do it with. That is the most important part as there are a lot of people who have the best of intentions who can get it wrong, and others who do not have the best intentions from the outset. 11) What do you think the impact of the FIFA World Cup and Olympics will be? I believe that it will bring a lot of attention from the international market and everywhere to Brazil and to Natal. I think it will be great exposure for the country but I don´t think it is going to have any real significant impact. In Rio for example the Olympics is going to have a huge impact because they are renovating one whole side of the city and that is going to revitalise the whole neighbourhood, which is great as it is prime real estate which is being occupied by “less affluent residents.” 12) What about from an infrastructure perspective in Natal obviously not the Olympics but The World Cup? Olympics will be good reform for infrastructure in Rio I think the football in Natal will probably do less than it should because I am not convinced all the promised infrastructure will be built in time. Brazilians are great at coming up with good ideas but they are not always as good at delivering them. The bridge was 10 years late and the although the runway at the the airport is done we are not sure the rest of it is going to get built in time for the The World Cup. However if everything gets done as they have planned it will make a huge difference to the city. Lagoa Nova is going to go through the roof with buildings and developments. But the reality of the matter is will it get built in time...I don´t know. I believe the football stadium will and I believe they will probably do what they do at Carnatal, close down every road within 3 km of the stadium and make everyone walk there. I don’t know if they are going to get the roads ready in time, I hope that they do but I am not holding my breath. Hopefully the airport will get done and that will kick off everything. 13) Do you think that once the world cup has been and gone the opportunity in Natal is lost? In Portugal for The Euros in 2004 it was great for the infrastructure in Lisbon but as for life changing stuff it had zero impact. I think The World Cup will be one heck of a great party, being in Brazil for its own world cup will a life time experience whether it will be a life changing event for businesses and companies, I don´t think so. I think at best the infrastructure that it leaves behind will help.  
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Interview with a Local Developer

With: Pian 
From: Sao Paolo 
Location: Petropolis
Date: Tuesday 24th September 2012

1) What is your current view of the housing market? Booming is what I see! People are selling, there are new projects all the time. Properties are being reserved all the time and very quickly . My hope is that this situation carries on for the next 10 years at least. The housing market is very strong. 2) Do you believe there is a property price bubble, or risk of one? At the moment I don´t think so. In the medium to long term there may be but we are talking about  5, 6, 7 years time from now. Property values will not gain the same as now. 3) With all the construction going on, do you think there is risk of an oversupply of property?  If so in which sector / at which price range? This is difficult to answer for certain as everything is selling out. Brazilian people are changing class and lifestyle fast. The city of Natal is growing, it is a capital with 800,000 inhabitants, which is a small city for a state capital. 4) What are the main challenges for agents/developers in the market? Bank, get money. Selling properties is easy. Getting start up finance to begin construction, the bank are limited to offer financing for projects until certain criteria are met. Selling properties is easy as demand is so high and the banks will finance the buyers, but to get the point that sales can begin developers need cash flow to get constrcution started. 5) What is the impact locally of global economic conditions? Does the man on the street feel this? No impact at all. People are enjoying their ability to spend, spend, spend for the first times in their lives. 6) How easy is it now for locals to get bank financing (mortgages and other sources)? It is very easy for locals to buy with financing on houses that are built or on off plan apartments. They can pay a small deposit of 10% over a long time-frame with monthly payments and the banks will in general finance the other 90%. 7) What is the split % of first homes and investments? The majority of purchases are for homes, 1st time buyers moving up in class and status. 90 to 95% of the market is for first homes. 75% of these homes are off plan and the rest, 25% are resale homes. 8) What are locals buying for investment? Apartments R$ 80,000 to R$ 120,0000 with spread payments over construction also plots of land in gated communities. 9) Where do you see the biggest opportunity in the market? Minha Casa Minha Vida Sector. Properties up to R$ 110,000, there are lots of people who can now get access to their first home thanks to this program. 10) What do you think the impact of the FIFA World Cup and Olympics will be? It will have a massive impact. Financially there is lots of spending going on. Maybe we wont see the impact right now but the money will change Natal forever.
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Interview with a local Brazilian Lawyer

With: Marcos Mauricio
Experience: 6 years of working in Business Law
Where: Petropolis
Date: Wednesday 26th September 2012

1) What is your current view of the housing market?

The Natal housing market is very complex as there are many different segments and sectors. There are homes for low, middle and high income families and also because of the climate this is a popular place for people to have holiday homes. In general I would say that apartments priced between R$150,000 to R$300,000 is a hot market for middle income local Brazilians buying a quality residential units. At the lower end MCMV properties are being bought like crazy also.  For 1st time buyers it is great now. More and more people that couldn’t afford a house before are buying now. The really hot market right now is property priced R$ 60,000 to R$ 300,000. The low income housing best growing market At the high end of the market there are luxury condominiums either apartments or villas of over R$1 million. These are not for locals but for people from outside of Natal. There is high demand for specific niche developments for the very wealthy. Brazil has lots of rich people and even more poor people, the gap is huge. 2) Do you believe there is a property price bubble, or risk of one? I still believe it is early days in the evolution of Natal´s property cycle, I am talking about the first homes market. I have 2 old friends in the construction industry both with differing views. One of them believes that he has 10 years to make money before there is a property bubble the other believes he will stay in Natal all his life as the opportunity here will be ongoing. For me I believe that for the next 10 years I don’t see anything affecting the positivity I feel for the Natal Property Market. 3) What are the main challenges for Natal and Brazil in general? In Brazil everything takes time, I always consider that the timeline for Brazil is a necessary evil. I have oncerns about the infrastructure, traffic and public services. I am hoping the world cup money will solve this. If it is accomplished I am very excited about the next stage of investment in Natal. It is necessary for every city to grow, we need to have basic public services such as health and education. Legislation is improving for money entering Brazil and leaving Brazil correctly. Measures of fiscal agents constantly checking against corruption, more and more these issues are being resolved. Each year it is getting better and better. The way that Brazil is producing resources and trading with China and India puts it in a good position. We have enough resources home and abroad. The Governement  is trying to change the way the poor people think, by making credit available and by providing lots of opportunities for poor people especially houses. 4) What is the impact locally of global economic conditions? Does the man on the street feel this? No impact Brazil is still growing, everyone I talk to more and more looks to invest in the local market. 5) How easy is it now for locals to get bank financing (mortgages and other sources)? It is easy to get credit but it is checked and vetted by Caixa Economica, people need to provide proper documents, for proper credit checks – last 90 day bank statemenst etc. The Law in B razil is that there is a limit  for everyone, only give credit up to 30% of combined family income. 6) What is the split % of first homes and investments 80% 1st homes market 20% investments Nearly all purchases are off plan, the resale market is in its infancy. 7) What are locals buying for investment? Everyone is trying to find plots to build MCMV houses. 8) Where do you see the biggest opportunity in the market? Capital Investmenst provide a great return in MCMV property (as long as you know how to do it) It is possible to profit out of it on a large scale is huge 9) What do you think the impact of the FIFA World Cup and Olympics will be? These events in the media have put Natal on the map. The key is the infrastructure and road improvements. The stadium will be finished by March 2013 and 3 out of 4 road projects finished by June 2014. The prospect of Natal growth  is huge I am confident there will be big future business in Natal.
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Interview with a Seamstress

Name: Maria Natalice
Age: 75
Occupation: Seamstress 
District where they live: Parnamirim
Interview location and date: Via Direta Shopping – September 27, 2012

Q. Today, do you feel your quality of life / financial situation is better off that you did 5 years ago?  A. My life is much better, because there were some big and positive changes for elderly people. Q. Generally are you positive about your prospects and the future? Or do you have any concerns? Why?
A. I am very optimistic, I love life! Q. Each month, do you manage to put some money aside (make savings for the future)?
A. I manage well and I help my family. However, I don’t save money. Q. Brazil Property: Do you own or rent a property? What type is it? If rent, when do you think you will buy a property and where would you like to buy? Do you have any investment property in Brazil?
A. I live in my own house. Q. If you take a holiday or weekend away where do you go?
A. I enjoy going to the countryside. Q. What is your favourite sport?
A. I love dancing. Q. Who is going to win the 2014 FIFA world Cup?!
A. Brazil will win, of course!
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Interview with a Merchant

Name: Fernanda
Age: 30
Occupation: Merchant
District where they live: Candelária
Interview location and date: Via Direta Shopping – September 27, 2012 Q. Today, do you feel your quality of life / financial situation is better off that you did 5 years ago?  A. I am more mature now and I think my life has improved a lot. Q. Generally are you positive about your prospects and the future? Or do you have any concerns? Why?
A. I try to be optimistic, but I worry about my daughters and stability. Q. Each month, do you manage to put some money aside (make savings for the future)?
A. Yes, I manage to save money. Q. Brazil Property: Do you own or rent a property? What type is it? If rent, when do you think you will buy a property and where would you like to buy? Do you have any investment property in Brazil?
A. I live in my own flat and we have a beach house, which we use in the summer. Q. If you take a holiday or weekend away where do you go?
A. I spend my holidays in my beach house and on my weekends I relax at home. Q. What is your favourite sport?
A. I don’t have a favorite sport, but since my daughters practice syncronized swimming, I guss that I like that best. Q. Who is going to win the 2014 FIFA world Cup?!
A. Brazil of course!
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Interview with a Teacher

Name: Denise    
Age: 42    
Occupation: Teacher  
District where they live: Ponta Negra  
Location: Via Direta Shopping – 27/9/ 2012

Q. Today, do you feel your quality of life / financial situation is better off that you did 5 years ago? 
A. Our life is better, generally because of the social politics that were implanted. Q. Generally are you positive about your prospects and the future? Or do you have any concerns? Why?
A. I am optimistic. Q. Each month, do you manage to put some money aside (make savings for the future)?
A. I am not able to save money, but my husband is saving money for the family. Q. Brazil Property: Do you own or rent a property? What type is it? If rent, when do you think you will buy a property and where would you like to buy? Do you have any investment property in Brazil?
A. We live in our own flat and my husband owns a commercial building. Q. If you take a holiday or weekend away where do you go?
A. We like travelling abroad. Q. What is your favourite sport?
A. I like football. Q. Who is going to win the 2014 FIFA world Cup?!
A. Brazil will win the World Cup.
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Interview with a Student

Name: Carla Lais
Age: 21
Occupation: Student
District where they live: Nísia Floresta Interview location and date: Via Direta Shopping – September 27, 2012 Q. Today, do you feel your quality of life / financial situation is better off that you did 5 years ago?
A. My life is a little better, because I got married. I don’t work, however, my husband has a better job now, which made our life better. Q. Generally are you positive about your prospects and the future? Or do you have any concerns? Why?
A. I am worried, because I am not helping with earning money. Q. Each month, do you manage to put some money aside (make savings for the future)?
A. Yes, we manage to save a little, but only because our parents help. Q. Brazil Property: Do you own or rent a property? What type is it? If rent, when do you think you will buy a property and where would you like to buy? Do you have any investment property in Brazil?
A. We live in our own house. Q. If you take a holiday or weekend away where do you go?
A. Since we live close to the beach, our family usually come to visit us. We stay at home. Q. What is your favourite sport?
A. I used to play handball. Q. Who is going to win the 2014 FIFA world Cup?!
A. Brazil of course!
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