- Real property growth in Rio de Janeiro
- July 6, 2011 | Author: Carlota Berault Moreira
- Law Firm: Miguel Neto Advogados Associados - Rio de Janeiro Office
In 1980s, Brazilian economy’s galloping inflation above 50% per month caused investment properties not be lucrative, since lease contracts gave rise to major discussions about how to adjust the rent value.
From 2010 on, however, the new Rent Law was enacted to regulate and update urban property rent matters, which has been a major factor for the real estate market growth.
The announcement that Rio de Janeiro would host the Olympic Games in 2016 and 2014 World Cup, combined with the implementation of Preventive Police Units (UPP) in the city slums have boosted and overvalued Rio de Janeiro’s property market.
Focusing on revenues the Olympic Games and World Cup will generate to Brazil, many foreign investors are now concentrated on the property market in Rio. Although world-famous areas such as Ipanema are among the ‘most-wanted’, their ROI is rather low. For this reason, investors currently seek high-potential areas, such as São Cristóvão and Quinta da Boa Vista.
The World Cup and the Oyimpic Games have brought high demand. These world sports events in the country contributed to the growth of the property market, further aided by local currency stability, access to credit facilities and expected lower interest rates.
Therefore, hosting the Military Games, the Olympic Games and the World Cup does create a highly favorable and profitable scenario to investors who decide to establish businesses in Rio de Janeiro.