By Richard Conti
May 24, 2007

No-one has been such a strong supporter of the northeast of Brazil as I have been in the past few years and my past articles prove it, which you can find here in the archives of the wonderful site. However, lately during my past few trips there and especially to the areas of the northeast and João Pessoa in particular I have reason for concern, and now can no longer with a clear heart continue to praise the area as I once have done.

It is no secret to any of us that the US Dollar is not bringing the buying power that it once did. In support of Brazil it is not Brazil that is entirely at fault but the US Dollar as well. Needless to say, or place blame on anyone, Americans are not in as good a position, nor is the area as great a value as it once was for us.

Aside from the US Dollar falling the people selling real estate there seemed to have severely inflated their prices. Once of great value in Brazil, the northeast and João Pessoa do not seem as great a value as other beautiful areas in Brazil, and in some cases far less affordable then even here in the States as it once was a short time ago. What is going on? I see no sound reasoning for such increases. I believe it is being driven by greed now, and is a very bad climate to buy in as well.

I fear now, as many others (Brazilians and Americans), that our worst fears are in fact coming true in João Pessoa now. That is no improvements in flights to the area, or reasonable fares, or improvements to the area’s infrastructure. Overcrowding is more inevitable than ever.

Can the local governments support this influx of people? Can they afford to make the necessary improvements? Can they get money from the Federal Government there to help them? I fear no” is the correct answer.

For these reasons and many others I feel greed has overcome the real estate market there as it has here in the States as well, as some areas in Brazil only hurt many many people rather then help them make their dreams come true.

In the case of the northeast and João Pessoa it is even more serious then here in the United States, where victimized or unaware unfortunate buyers have the option of foreclosure and or bankruptcy and not losing all of their investment and hard earned dollars. In Brazil you pay cash for your homes and when you lose you lose big!

So my advice at present is the old saying “Let The Buyer BEWARE” and in the case of João Pessoa this has never been more true then I believe it to be at present. You now have to be extra cautious as to what you are paying for a property there. Even more cautious as to who you are dealing with as well.

Let us not forget for a moment the problems of seas rising and global warming, effects which have already caused problems in the João Pessoa areas, especially in the beach areas. Many of the areas have been deemed erosion areas by local government now by the beaches especially of Ponta do Seixas and Penha. I have seen first hand some of the problems.

This is not to say that one must give up on this once promising, area but move ever so slowly and be ever so cautious there now and play the waiting game, as many of us are doing now. What will be, will be, but if it remains as bad as it has become or gets even worse as I fear it may, it may be time to look elsewhere in Brazil where your Dollar may be well spent and not wasted or washed away by high tides.

I for one am disheartened by these latest developments and possibly cause for some of them due to my many articles praising the area as I have always done. I have done so with good reason and good intentions but things seemed to have taken off into the wrong direction and I fear they will not change course and many an investor there will be seriously hurt now.

I would much rather be bringing you good news rather then bad, but as I have brought so much attention to this area through my articles here on and other sites as well, I feel obligated to tell you the bad news along with the good. It is only right and fair.

Beware, beware, beware, my friends, and do be cautious and take your time if you do decide to look in this area of João Pessoa and Brazil. Brazil is a wonderful country with even more wonderful people but more so there, as in America, one has to be very cautious of many, many factors when investing in real estate.

Move ever so slowly and wisely and if anyone tries to rush you into anything take that as a sign that you need to look deeper before over paying or buying a problem property and taking that leap into paradise! The horror stories continue and they are just beginning in João Pessoa as they have in other areas of Brazil and yes here in the States as well.

Please be very careful. Please feel free to e mail me with any questions or concerns I may be able to shed some light on for you.

Readers comments:

While my Brazilian wife have been looking into moving to Brazil the Brazilian Real (B$) has moved between 2.8 to the and 5.4 to the .

This is very important to anyone looking to transfer large amounts of money, it would seem to me that if you can get B$4 to the that is a good rate looking over the long term.

I don’t believe the problems between the R$ and the US$ are the fault of Brazil but are as a result of US foreign policy, but even without the US foreign policy the R$ will grow in value over the US$, Just look at what Lula has done over the last 4/5 years in paying back the debts to the World Bank, IMF and bank of America, he has untied the hands of Brazil allowing the Brazilian Government to set Government policy for the first time in decades, until he paid of these debts Brazilian Government policy was dictated by others as conditions of the loans.

I also think the comments about the price of property going up because of greed are a little premature, I personally believe the “advertised” prices for property don’t mean anything, it is the price that is eventually paid that is important.

Brazil being one of the BRIC economies and the low cost of flights means that many European property companies are looking to Brazil to expand there markets and it is this that is artificially inflating the “advertised” price, my understanding from people we know who live there is that prices being paid are still good value and they say they have seen little if any inflation on the prices being paid.

The number of Brits and other Europeans moving abroad is getting larger every year, it was the case for many years that Brits were moving to Spain, but this is no slowing down due to many thing, bad deals and deals going wrong being publicized widely in the press and on TV, also concern over some of the “land grab laws” and stories relating to them, but I also believe many people are now looking at Spain as a country where Taxes and Prices have to go up, the reason for this is the expansion of the EU that will mean Spain will need to become a net contributor to the EU to cover the costs incurred in expansion and money that was going to Spain to help with infrastructure and other cost are now being diverted to the “new” EU courtiers.

This has meant that many (and there are many) companies advertising “properties abroad” have widened there areas and South America and a stable Brazil is a prime target for these companies and as such they are inflating internet prices as they need to make larger profits than many Brazilian based agents, but as they are paid by the vendor no sale means no money, so they want top price, but as I say above, this means looking on the internet it appears prices are going up; but looking at the market on the ground prices are staying about the same.

We just had friends buy a beach house that was advertised for R$200,000, but asking locals they found the house had been on the market for 15 months or more, so they offered R$160,000 and got the house after saying that was there one and only offer.

I have also noticed that many of the properties we have look at; and again from friends living in the area that many properties are on the market for many months, if this is the case then I can’t see putting the price up will do anything other than keep it on the market longer, it is basic supply and demand, if what we are told is true, that houses are not selling and staying on the market for months then there is no demand and over supply, so if anything prices will have to fall.

Anyway we will find out for ourselves next month as we leave the UK for Joao Pessoa, we will be looking for a house right away and I will try and keep people posted via the forum.

I would agree with the points made about checking that when you buy a house you really do buy a house, this is the same anywhere in the world, it is up to the buyer to ensure that the house belongs to the person selling it, to check that there are no outstanding claims against the property, that it will not be under 6 foot of water in 10 years time and that you will not have a 400 bedroom hotel built next door

— London Lad

Richard is an American born and raised in New York City in the shadows of the once towering World Trade Center. He now lives in beautiful Boca Raton, Florida. He is presently doing design work and general contracting, but his dream is to complete his private community in João Pessoa, Brazil, and to move there with his Brazilian girlfriend. Once there he wants to devote time to building many many more projects with Americans and Brazilians in mind. In his spare time he wants to write many many more enjoyable articles for for you all to enjoy. If you want to contact Richard by email then send to

Previous articles by Richard:

Brazil: Let the Buyer Beware
The US Real Estate Bubble has moved South to Brazil Part 2
The US Real Estate Bubble has moved South to Brazil Part 1
Thoughts of Brazil and João Pessoa Part 2
Thoughts of Brazil and João Pessoa Part 1
Brazil is Looking Better and Better Everyday
Brazil’s Best Kept Secret

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