RIO DE JANEIRO, BRAZIL – While more and more Brazilians are looking for meat bones in dumpsters in many cities, Brazil’s upscale luxury real estate market is celebrating record sales. Never before have so many properties worth more than R$30 million (US$5.2 million) been sold in the country, say specialized brokers heard by G1 media.
Benjamin Cano, partner of Rio Exception, says that in the 11 years he has been negotiating the purchase and sale of luxury properties in Rio, he has never closed so many deals.
“We have almost three sales a month, which is totally atypical for this type of property. My portfolio is sold out. Today I only have three apartments left over R$50 million, and I feel there is a lack of extraordinary products. There is a shortage of really high-end properties,” Cano says.
When asked by G1, Patricia Judice de Araujo Esteves, vice president of Judice & Araujo (J&A), a brokerage firm that also specializes in high-end real estate, denied that the crisis caused by the pandemic has affected her business.
Patricia Judice said the greatest demand came from “clients in the financial market and technology companies.” Bughon and Cano said that it is foreigners, especially Europeans and Americans, who are looking for luxury properties in the country.
At Rio Exception, for example, all marketing is done outside Brazil. “It’s an investment of almost US$20,000 a year just for distribution in specialized locations outside the country where we exhibit our portfolio,” Cano pointed out.
DEVALUATION OF BRAZILIAN CURRENCY
Amid the pandemic, the real was the currency that lost the most value last year. And the devaluation continued in the first half of 2021. This is the main explanation for the explosion in sales of luxury real estate in Brazil.
Considering the exchange rate in mid-October, when the American dollar was at R$5.51 and the euro at R$6.52, a R$50 million apartment would cost about US$8.9 million, or 7.6 million euros.
“With this drop in the Real, we had many clients who had always wanted to invest in Rio and took advantage of the exchange rate. We have also often heard that investing in banks does not give a good return, so they prefer to invest in real estate,” added Arnaud Bughon, CEO of Latin Exclusive.
The brokers stressed that it is natural for foreigners to make a financial profit when buying luxury real estate in Brazil. “These properties have a good return on seasonal rentals and an even higher profit when they are sold,” Bughon pointed out. Another characteristic of the buyers of these properties is the method of payment: Cash.
THE GREATEST SUPPLY CONCENTRATED IN RIO DE JANEIRO
With its unique natural landscape, Rio de Janeiro, known worldwide as the “Marvelous City,” has the greatest supply and demand for luxury real estate in the country.
Prices for properties considered particularly luxurious in Rio start at around R$30 million. One example is a penthouse on Avenida Vieira Souto in Ipanema, for sale at J&A for R$35 million.
At 793 square meters, it has four suites, living/dining, and TV rooms, two bathrooms, an office, and four suites, the largest of which has a closet, two bathrooms, and a pantry, as well as a terrace with a swimming pool, gym, shower and Jacuzzi overlooking the sea.
The same real estate agency is currently offering a house in Leblon, a neighborhood with one of the most expensive prices per square meter in the country, for R$45.5 million. It does not have an ocean view but has 1,000 m² of built-up area on a 660 m² lot. It has been recently renovated and is fully automated. It has five suites, a leisure area with a swimming pool and a garage for four cars.
In the same price range, Rio Exception offers a duplex penthouse on Avenida Atlântica, in Copacabana, with 950m2 that overlooks the most important postcards of the city: the entire Copacabana beach, Christ the Redeemer, and Sugarloaf Mountain. It has four suites, the largest of which is 70m2, a dining room for 20 guests, a 10m swimming pool on the terrace, and furnishings designed by Philippe Starck and Le Corbusier.
Rio Exception also has in its catalog one of the most mythical properties in Rio – a triplex in Flamengo, entirely in Renaissance style, with no less than 4,000 m². The second floor is dedicated only to the reception of guests and has a dining room for 24 people, connected to the other rooms by a magnificent Carrara marble corridor.
The second floor has four suites, while the penthouse has a leisure area worthy of a luxury club – heated pool, all marble, outdoor barbecue area, a lounge bar, bar-restaurant for garden parties, game room, gym and saunas, dry and steam sauna and wine cellar.
The price of the triplex in Flamengo is being kept secret and will only be disclosed to prospective buyers, whom Cano is eager to verify are in a position to buy beforehand. In his opinion, “there are probably only ten people in the world who can buy this property, not only because of the price, which is well over R$50 million but also because of the style of the interior.”
He added that no Brazilian has been interested in the property for a year.
Latin Exclusive highlighted that its catalog includes a house in Jardim Botânico and a farm in São Conrado, both in the Zona Sul of Rio de Janeiro, with a price tag of around R$80 million.
Outside the wonderful city, the same real estate agency offers for around R$74.5 million a private island located 7 km off the coast of Angra dos Reis on the Costa Verde (Green Coast). With an area of 25,000 m², it also has a private beach and luxurious accommodations. The main house alone has three suites – a master suite, a king-size suite, a bedroom suite, and two bungalows.
Those who buy the island already have a speedboat with them to make the less than 10-minute crossing from Frade beach in Angra dos Reis. The island has a helipad that can accommodate up to two helicopters, but aircraft are not included in the price.
HIGH COSTS
Before buying a property in this price range, you should know that it is not only worth millions, but also comes with high costs.
Only at the time of purchase, about 5% of the value has to be paid for the Property Transfer Tax (ITBI), which is added to the deed and registration. For a property worth R$30 million, these taxes amount to about R$1.5 million.
Also consider the urban property tax (IPTU), which varies depending on the location. In the South Zone of Rio, the tax for a property worth R$30 million would be at least R$120,000 per year, an amount that can be paid in installments of R$10,000 per month.
Added to this is the monthly cost of condominium administration, which in Rio can be as high as R$20,000 in buildings that have 24-hour armed security and services such as a gym, spa pool, and other amenities.
Source: G1