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A Coastal Retreat in Brazil

A FIVE-BEDROOM HOUSE ON THE BRAZILIAN COAST

USD 650,000

This five-bedroom house is a short walk from a white-sand beach on Brazil’s northeastern coast, about 30 miles from the popular tourist destination of Natal. Built-in 2006, it is part of a small gated development of 16 homes called Quintas do Coqueiral.

The 4,300-square-foot house sits on about 1.2 acres of palm trees and grass. Visitors enter through two large wooden doors framed by pillars. The double-height foyer opens to a living room and covered patio. A pool and Jacuzzi are in the backyard, with a wooden deck.

Mike Smith, owner of Brazil Beach House, the company marketing the property, said the floors on the ground level are white marble concrete, a form of concrete with sand and marble grains mixed in. Mr. Smith said the doors and windows are trimmed in Brazilian hardwood, and the exposed beams and pillars are eucalyptus. You can see more information here.

From the foyer, stairs lead to a mezzanine level currently used as an office. An open-air deck is off the mezzanine.

All the bedrooms are on the ground floor. In one wing are two large bedrooms with a walk-in closet; the master has sliding glass doors that open to the pool deck. Two smaller bedrooms are in the other wing. All the bedrooms have en-suite bathrooms with marble counters.

The ground floor also includes a dining room, television room, and another bathroom. The kitchen is off the dining room and overlooks the pool area. It has two refrigerators, an electric drinking fountain, and a six-burner stove.

The maid’s quarters, adjacent to the kitchen, include a bedroom, a bathroom and a small attached garage, large enough for a single car. There is also a detached two-car garage on the property.

Mr Smith said the furniture is not included in the asking price but is available for an additional 100,000 Brazilian real (or about $31,000).

The property is about a half-mile from the village of Maracajaú, a popular diving spot. About a 45-minute drive from the house, Natal is the capital of Rio Grande do Norte, with a population of about 850,000. The closest airport is the Governador Aluízio Alves International Airport in São Gonçalo do Amarante, about 25 miles away. Still, most international flights are routed through Rio de Janeiro or São Paulo.

MARKET OVERVIEW

Brazil is emerging from a lengthy recession following years of political turmoil. When inflation is factored in, home prices fell 3.23 per cent in 2017 and 5.38 per cent in 2016, according to the FipeZap Index, which tracks sales in 20 Brazilian cities.

In recent years, “supply exceeded demand considerably,” said Andreas Hahn, a senior partner with Hahn Consulting in São Paulo. But lower prices and an improving economy are bringing buyers back to the market, he said. Brazil’s economy is expected to grow 1.9 per cent in 2018, according to the International Monetary Fund.

“For the first time in several years, the Brazilian real estate economy is returning to an equilibrium state,” Mr Hahn said, with supply and demand in better balance.

Sales in the middle-price range were the hardest hit by the downturn, said Marcello Romero, chief executive of Bossa Nova Sotheby’s International Realty in São Paulo. He added that government subsidies boosted the market’s lower end while the high end was less affected.

n São Paulo, where he is based, the sales volume was up 46.1 per cent in 2017 compared with a year earlier, according to data from Secovi, a property industry association.

“We think the worst moment is over,” Mr Romero said. “Most developers are preparing their launches soon, especially in the major cities.”

Although no official data is available on sales in the Natal area, agents said prices have fallen between 10 and 20 per cent in the last three years.

“The northeast is more of a holiday marketplace,” said Steve Gallagher, owner of Brazil Overseas Property, and was more vulnerable when the economy slowed. “Political uncertainty,” he said, also plays a major role in the market as potential buyers await the results of the presidential elections later this year.

“I expect confidence to grow within the market at the beginning of 2019,” Mr Gallagher said. “And we should see property prices increasing steadily from then on.”

Mr Smith said there are already signs the market is picking up. “The last quarter of 2017 saw the first signs of growth.”

He said that in the last five years, the value of the Brazilian real has dropped by almost 40 percent against the American dollar, making Brazilian real estate more affordable for buyers from the United States.

In the Natal area, he added, homes in gated communities priced between $150,000 and $600,000 are the most popular with foreign buyers.

WHO BUYS IN NATAL

The northeastern coast primarily attracts “new buyers, mover-uppers and second-home buyers,” Mr. Gallagher said.

Mr Smith, who primarily works with foreign prospects, said foreigners make up about 25 to 30 per cent of the buyers on the coast. Of his clientele, about 20 per cent are from Portugal, he said, with buyers from Italy, Spain, Scandinavia, the United Kingdom, the United States, and Canada each making up about 10 per cent of his business.

Mr Hahn said international buyers represent about 10% of the Brazilian real estate market.

BUYING BASICS

Juliano Ribeiro Lomonte, a real estate lawyer based in Natal, said foreigners buying property in Brazil are not restricted except in rural or border areas. However, foreigners do need to obtain a tax registration number, known as a CPF, to buy property.

Buyers typically make a 20% down payment, and the final deed is signed before a notary. “The whole process normally takes between 30 and 60 days,” Mr Smith said.

Agents said the transaction is straightforward, but buyers should hire a lawyer to oversee the process. “A lot of times, sellers don’t know about the taxes or restrictions on the land,” Mr Lomonte said.

TAXES AND FEES

This property has a local transfer tax of 3 per cent, and notary fees are usually about 2.5 to 3 per cent of the sale price, Mr Smith said. Depending on the property and the lawyer, a lawyer might charge USD 2,000 to USD 5,000.

Source: NY Times

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