Good news for property investors in Brazil as economy continues to grow

www.fly2-let.co.uk

June 12 2010

Owners of holiday homes in Brazil should soon be reaping the benefits of increasing consumer confidence and more job opportunities as analysts suggest 2010 is likely to be a better year for the country's economy.

People looking to invest in Brazilian property in the future also have reason to smile as new real estate rental laws have made things much simpler for fly to let property investors and landlords.
Brazil was one of the first nations to officially emerge from recession; with latest figures from the Central Bank showing economic activity is running at one of the highest rates in the world.

According to Brazil Magazine, the nation has raised its gross domestic product growth predictions for 2010 to 5.5 percent from 5.2 percent and the government hopes to see 2.5 million jobs created this year.

Consumer confidence in Brazil is also on the rise, according to the latest Getulio Vargas Foundation (GVF) report.

The foundation's consumer confidence index rose to 116.1 points in May, from 115.4 points in April, marking the third consecutive month of increases.

Jose Santiago, an attorney at law, writing for Gringoes.com, said that new rental rules, known in Brazil as ‘Nova Lei do Inquilinato' are now being applied to both new and old rental and lease agreements in the country.

It means that landlords now have more power in evicting tenants if they do not pay the rent and that if the tenant decides to rescind the agreement before its term, then they will have to pay a fine proportional to the period left on the lease deal.

He explained: "Landlords will now start offering their properties without the necessity of any rental guarantee, which will help not only the real estate market, but also anyone looking for a real estate property for rent."

Some concerns have been raised, however that the level of financial growth expected could mean the Brazilian economy is in danger of overheating.

The authorities have reassured Brazilian property owners that steps will be taken to ensure that this does not happen.

Secretary of economic policy Nelson Barbosa said: "We see an average growth of between 5 and 6 percent as sustainable. If growth goes higher than that, you have to take gradual measures to return it to that range.

"It could be a tighter fiscal policy to ensure economic stability in the medium and long term."