By Maria Lopez Conde, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Macaé, located 180 km north of the city of Rio, today is a city transformed. Since the discovery of enormous oil and gas deposits in the Campos Basin in 1974, the once modest fisherman’s village of Macaé has grown by leaps and bounds, with no signs of development slowing.
In thirty years, the city’s population has increased threefold, jumping from 75,000 to nearly 220,000, and in the last decade, its economy expanded by 600 percent.
With a ballooning population of both Brazilians and foreigners, construction of high-end hotels and new housing developments fueled by the expansion of the oil and gas field, Macaé continues to evolve into a budding metropolis.
Kevin Costello, an American living in Rio, has commuted to Macaé for the last year and a half and told The Rio Times: “During just that time frame I have seen it change quite a bit.”
“The hotels and pousadas [Bed and Breakfasts] if not booked at least a week in advance will not have room.[…] Traffic has increased, it can take a while getting around town [and] you can see the buildings going up with apartments,” Costello describes.
The Campos Basin, where Macaé is located, is responsible for 80 percent of Brazil’s oil production and 47 percent of the total natural gas production, according to the mayor’s office. The development of these industries has filled the city’s coffers in recent years, and today, royalties levied on oil extraction account for thirty percent of Macaé’s R$1.8 billion budget for 2013.
Due to increased funding, the petroleum capital of Brazil has been able to invest in education, health and housing for its population at a rate 3.4 times higher than the national average. Macaé boasts the country’s lowest infant mortality rate, as well as one of the state’s highest literacy rates.
While violence has increased and favelas have grown, Macaé’s oil boom is also propelling the expansion of the real estate market in the city.
According to Márcio Murade, a partner at Capital Negócios Imobiliários, a real estate company that services Macaé and the neighboring city of Rio das Ostras, the arrival of established construction companies and the creation of luxury apartment buildings are evidence of Macaé’s growth.
“The market has changed. We have noticed the arrival of a rising number of builders, which bring a higher professionalization for the market,” Murade told The Rio Times. “Now you see bigger companies here with even bigger projects: high-end housing with condominium club concepts, top hotels and flats so the change is very clear.”
Murade believes growth is set to continue this year, as the city’s population continues to rise. “Demand here is much higher than supply and this is true for those looking for hotels and housing because the city doesn’t really have an infrastructure that is compatible with its actual size, so we will see a sizable level of investment to fill that gap.”
“Macaé’s population will increase from 220,000 to 300,000 in the next four to five years, so it will continue growing and with that, we’ll see more projects and developments.”
Although square foot prices in Macaé are about 30 to 50 percent lower than in Rio de Janeiro’s Zona Sul (South Zone), square foot prices in the Campos basin have nearly doubled since 2009. This is why, Murade argues, investment opportunities end up paying off.
“Macaé’s market has not stabilized and it continues to expand, so this is why there is a bigger opportunity for growth of real estate investments there,” Murade added.