A Buyer's Opinion

I was once a buyer here too. And some of the reasons I bought may apply to others also.

Comparisons with other places we've lived and owned land, in a later post. (Hawaii- Oahu, Big Island, Kauai, Molokai; Costa Rica- Central Plateau, tip of the Osa Peninsula; Rio and Florianopolis, Brazil; Western Australia; Southern California, many places.)

For now, speculation on real estate appreciation, due diligence and the purchase process, and an overview of the Peninsula...


There are as many reasons to buy property as there are buyers. But almost always, there's something in the back of a buyers' mind.........

FUTURE REAL ESTATE VALUES

I have no crystal ball, but here's my opinion and an intelligent guess......

When we arrived 2 1/2 years ago, I compared the price of a beachfront/linear meter on Marau with that of trendy beach destinations like Trancoso and- farther south near Rio- Buzios. I assumed the most attractive beach areas in Brazil would have comparable prices, and the more established destination more expensive. I figured beachfront at already established, 'in beach destinations was the benchmark- at prices below which those in the process of becoming fashionable, like Marau- must fit. According to a prominent land agent in Trancoso several years ago, prices had been stagnant there for several years. I jumped to the conclusion that Marau could not yet support prices as high as Trancoso's, let alone higher.

I was wrong.

The current beach destination "fashionable index" might be measured by exposure in top travel magazines and travel sections of major newspapers plus celebrity purchases. In other words, if a place like Marau were perceived as more "in" than a more traditional top beach area, thene the price ceiling at a place like Trancoso, for example, might simply be ignored. I did not believe them, although I figured they should know better than I.

What has actually happened in the last 2 1/2 years, from what I am aware: Trancoso beachfront has increased in value 60-100%. Last time I checked, around US$12,000/linear meter. Marau was much less expensive at that time. But due to extravagant print media exposure, the building 2 years ago of one of Brazil's premier small resorts, KIAROA and the opulent tropical home of Duda Mendonça, Lula's campaign marketing guru- prices have reached about the same level. The relation of price ceilings to what is currently "fashionable" or "in" may be questionable. I don't know. But what seems clear is beach front in Brazil IN GENERAL is escalating in value. There is VERY little truly desirable beachfront along the entire Brazilian coastline for those looking for a pristine, untouched environment. I 'm not referring to those who are happy to accept the myriad problems that come with overdevelopment, more advanced infrastructure, roads, restaurants, airports and population increases from all socio-economic levels. For those who want this, there is plenty available elsewhere.

But times have changed........ Fewer and fewer believe infrastructure is important at the high end of the beach property market. Those with resources "bring their own"- whatever it is: Satellite TV, internet, private planes/boats/helicopters, reduced time and financial constraints on travel in and out, etc. Clearly there are those that expect, along with a beach residence, lots of great restaurants, night clubs, cultural opportunities, international and domestic air connections, etc. This is characteristic of those who buy land in Buzios, which has all this in abundance. Or Arraial d'Juda and Trancoso, which are fast gaining it. But it is not characteristic of those seeking a place like the Peninsula de Marau.

The Peninsula is a quite different market.

The "Linha Verde" (Green Line) eco tourism highway from the Alagoas border to southern Bahia is due to be completed within a year. It will complete the last remaining link, from Camamu to Itacare. When finished, the highway will skirt the base of the Peninsula, and improve access. However, problems are not anticipated since the Peninsula will continue to be serviced by the rugged ( BR-30 running up and down it. I'm sure we can expect an increasing number of independent travelers, 4WD tours and better logistics to resupply here on the Peninsula. Aong with rising property values which always accompany improved access. But if there is one lesson we have learned here, it is that not only do access and property values rise together. But if allowed to go to far, will kill the goose that lays the golden egg.


CAVEAT EMPTOR

It's amazing how ill informed property buyers can be. How little due diligence, how ingenuous. Foreigners are not alone, although unfamiliarity with the language, laws and customs makes them seem especially defenseless. A Carioca lawyer we know put his foot in it, buyingindocumented land. And paid the price for it. Although a lawyer himself, he did it twice.

The obvious: Before purchasing real estate here, there or anywhere in the world- complete documentation is essential. Especially in a so called 'backward' rural area like this one. A traditional fishing and subsistence agricultural society confronts sociocultural change, expanding development and dramatically escalating land prices. Land ownership and acquisition are changing fast. Many believe that, very soon, little beach front will remain in the hands of local owners. Most will be held by wealthy Brazilians from Rio, Sao Paulo and Belo and foreigners.


OVERVIEW

Many of the bigger properties run most of the way or entirely across the Peninsula. Land in the center is is often unused or unusable. Approximate distances Ocean to Bay, c. 2-4 kms; Ocean to Highway BR 030, c. 1-2 km; Bay to Highway, 1+ km.

For almost everyone, Bay or Ocean frontage are the properties of choice. Far from large bodies of water and views, the center of the Peninsula is hotter, less desireable, and often little vegetated. Breezes from the 2 bodies of water average under 10 knots. They almost die out within the first 200 meters or from the beach. A large part of the center of northern part of the Peninsula is a pantanal, often flooded in winter. A pantanal is allmost entirely barren of trees and large bushes. Nonetheless, it is strictly protected under the APA since the pantanal is fragile, and important to the ecosystem as a whole.

The center of the Peninsula is little used, except for E.-W. landing strips. There are 5-6 of these, including Duda Mendonça's, "the Italians'" at Bombaça which the air taxi to/from Salvador uses, Kiaroa Resort's and Pousada Taipus de Fora's.