Why A Falling Pound Has Increased The Attraction Of Brazil Property

Property in BrazilI have just returned from a holiday in central Europe. It was a nice break, the weather was good – hot most days with a fair amount of sunshine.

This is what I like about jetting off, it recharges the batteries and with the weather not so good in the UK, I can at least come back with sun tan.

Unfortunately there was just one problem…

When I got on the flight to head back to the UK I soon realised the lack of spare money I had in my pocket. There wasn’t much left to spend on those bottles of duty free wine this year.

This is because the Pound has suddenly weakened again against the Euro – falling 6% in the 12 months since my last holiday.

I looked into this further today and I have learned that the Pound has in fact fallen against 80% of the world’s leading global currencies in the last 12 months. So this goes some way to explaining why a walk around the shops on my holiday revealed prices that were roughly similar to what they were in the UK.

This was despite that country having an average disposable income of just €400 a month

No holiday bargains this year I thought.

It’s much the same with property investment. For every £500 I might spend on buying goods in Europe, it will cost me £30 more. This might not sound a lot until that £500 is multiplied by several times over and that holiday home abroad I had my eye on ends up costing me £1,000 more than it would have done last year.

So if Eurozone property, which let’s face it offers little in the way of growth at the moment ends up costing more on currency alone, where should an overseas property investor holding Pound Sterling be looking?

The answer is outside of Europe, away from Asia and even beyond the US and Central America where the Pound has taken a real battering against the Mexican Peso – losing 10.5% of its value.

I can tell you that the place where Stirling investors can get more value for their Pound at the moment is South America. The Pound has risen 3.3% in the past 12 months against the Brazilian Real.

This makes your money stretch 20.7% more than it did as recently as 2011.

Brazil is the focus of the World’s attention at the moment in the build-up to next year’s World Cup and the Olympics in 2016.  It is also one of the fastest growing property markets in the world and with that little bit of extra help with currency value, South America looks even more attractive.

Come to think of it, maybe I should be booking a holiday to Brazil next year.

Are you feeling poorer when shopping for overseas property? Please leave your comments below.

Kind regards

Brett Tudor
Property Expert

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