Prices of real estate going up
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On April 17th 2005, newspaper Tribuna do Norte published a report about the prices of real estate in Natal and Rio Grande do Norte. The original report, in Portuguese, can be read here (link removed, page not available any more - Oct. 2006).
The title of the report is "Demand causes prices of real estate to inflate".
Over the past six years, many Europeans (especially Portuguese), taking advantage of a strong euro, have been investing in real estate in Brazil; Rio Grande do Norte is the main destination of investors.
This increase in demand, coupled with a scarcity of terrains, has caused the prices of real estate to go up. Today, Natal is the second most expensive city in Brazilian northeast to buy real estate; the most expensive is Recife. According to the Realtors Union, Natal is 45% more expensive than Joćo Pessoa.
In Natal, in average, the square meter goes for R$2,000.00, whereas in Joćo Pessoa the cost is R$1,100.00; in more expensive areas, like Ponta Negra, the price may reach R$3,500.00 (currency conversion here). The main reason, according to Caio Fernandes, leader of Realtors Union, is the cost of terrains: while there is still plenty of clear areas in Joćo Pessoa, there is no more clear space left in the south zone of Natal.
Still according to Caio Fernandes, just two years ago, the price of the square meter is Ponta Negra was R$ 1,000.00. The high demand by foreigners (particularly Portuguese and Norges) caused the prices to shoot up.
"The cost of construction in Ponta Negra today is around R$1500.00 per square meter; add to this taxes, labor costs, profit, and the minimum price should be around R$ 1800,00. If anyone is selling cheaper than this, the buyer should be suspicious", says Caio Fernandes.
The foreigners are now going out of Natal, looking for other opportunities. Caio Fernandes says that "Portuguese, Norges and Spaniards already purchased nearly the entire cost of Rio Grande do Norte"; in most cases, they bought large areas and built houses and condos targetet to foreigners (read this other page about foreigner investments in Rio Grande do Norte).
In other areas, like Cidade Verde, in Nova Parnamirim, finding a terrain for sale is more and more difficult. "A possible solution to lower prices would be if the Army sold areas which today are protected zones", says Fernandes.
Another factor to impact the cost of apartments in Natal is the restrictive legislation. Approved in 2000, the Director Plan prohibited constructions in several areas, and restricted the number of floors of buildings in others. According to Silvio Bezerra, President of Civil Constructors Union, this obliged constructors to increase prices.
Still accordingto mr. Bezerra, terrains in the north zone of Natal are three times cheaper than in south zone. With the conclusion of the bridge over river Potengi connecting the Praia do Forte to Redinha, a new frontier will be opened (NOTE by Natal-Brazil: today, there are two ways to get across the river: taking a ferry boat or driving about half an hour; the bridge will shorten the trip to less than five minutes).
Read also: Real Estate and Properties for sale in Natal and Rio Grande do Norte
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