Why Bahia?
Our approach to everything is to be as thorough and detailed in all the advice we give during all stages of the investment process. Below offers more detail on Brazil as an investment location. As this is detailed, if you would prefer to read the information at a later date, feel free to down load our PDF document which encompasses all the detail below and more!
Please click on bullet points below or scroll down for further explanation:
• Introduction – 1200km of coastline, undoubtedly the best beaches in Brazil, pristine rainforest in the South, a beautiful idyllic setting - this is quintessential Brazil!
• Climate – all year round sun and glorious breezes, meaning the weather is rarely stifling, average temperatures of 27°C.
• Cheap Land Prices and Fantastic Growth Prospects – attractive stage on both the growth and the development cycle. (link to article 8 in resources – cheap land prices).
• Expanding Local Mortgage Market – this is largely due to a combination of falling interest rates and new laws making credit more readily available.
• Excellent Economic Prospects – Bahia boasts a diversified economy, with tourism and inwards investments to further boost this.
• Underdeveloped Property Market – get in early.
• Excellent Accessibility Both Internationally and Domestically - Salvador has regular flights to Europe and the USA and is well connected domestically.
• No1 Holiday Destination for Brazilians - ideally located for tourism and second homes for the predominately Southern based population; unlike the very Northeast of Brazil, such as Natal, which is hours further, less beautiful and often more expensive.
• Excellent Quality of Life, Genuine Paradise on Earth.
• Many of Brazil’s Most Attractive Beaches and Upmarket Beach Resorts – please read our descriptive section on Bahia for more detail.
• Excellent Infrastructure Already in Place – Bahia was the first part of Brazil to embrace tourism.
• Booming Yet Underdeveloped Tourist Market - predicted to continue growing exponentially. Most of the major tourist and hotel groups have, or are coming to town. We can provide detail of all the major developments in the area on request.
• Unrestricted Property Ownership and Security of Investment – no tornados, hurricanes, tsunamis, earthquakes, volcanoes, unrest or racial tensions. No restrictions on foreign ownership, inward investment is actively encouraged, and all Brazilian property is freehold.
• Good Rental Potential – with tourism very much on the up and all year round rental prospects, excellent rental yields are potentially achievable. Brazil Bahia Property provides a full rental service for all properties.
• Low Cost of Living – can be as little as half of Western standards.
• Fantastic Culture, Lifestyle and People.
• Plenty to Do and See - diverse activities and outstanding scenery throughout Bahia.
• Favourable Tax Regime – no capital gains tax after 5 years.
• Cheap Construction Costs.
Click here for FAQ - how do I get to Bahia from abroad?
Introduction to Bahia
As one of the largest states in Brazil, Bahia is a heavyweight in its own right. With over 1200km of delightful coastline, an average temperature of around 27°C, the area is culturally, visually, historically and economically laden with reasons to invest or to visit.
Not only does Bahia boast the historical foundation of Brazil; Mount Pascoal in the south of the state was the first sighting by the Portuguese in 1500, it is culturally diverse, replete with tourist attractions and appeals to the international and domestic tourist markets alike. Essential to this is its location, both accessible to Brazilians from the populated south and to the wider international holiday maker through its international links.
At 567295 km2, Bahia is only slightly smaller than France and is populated by around 13million people, mainly based in coastal locations. The most important city is Salvador, a UNESCO world heritage site and a phenomenon in its own right, boasting one of the largest collections of colonial architecture in Latin America (link to description of Salvador). Other places of major repute include Praia do Forte, Morro de Sao Paulo, Itacare (including its surroundings), Porto Seguro, Trancoso and Arraial d’Ajuda. Bahia also houses the awe-inspiring national park Chapada Diamantina, undoubtedly one of the most beautiful in Brazil.
It is hard to imagine a better year round climate than that of Bahia. Although the summer months can be as hot as Rio, sometimes up to 35°C, temperatures in Bahia are rarely far from 27°C.
The coastal regions of Bahia experience a year round tropical breeze, this ensures the hottest days are bearable, making spending time in Bahia a pleasurable experience all year round.
Cheap Land Prices and Fantastic Growth Prospects
With so many reasons to invest in the Bahia region, the prices of the land make it an ideal investment location as well as a prime location to own property. On a comparative basis, prices are cheap both internationally, as well as versus other coastal regions of Brazil.
The potential for increased domestic demand in the Brazilian property market is immense. Traditionally the uptake of domestic mortgages has been relatively small, due to a combination of high interest rates and a lack of credit and mortgage provision by the banking sector. The knock on effect has been minimised domestic demand, as few buyers can afford cash purchases. A few factors could rapidly change this:
1. New laws encouraging the provision of credit and a better environment for banks to loan money. By the end of 2008, mortgage packages will be more readily available.
2. Falling interest rates. Political and economic stability have brought interest rates down from highs of 20% to almost 11% in just 5 years.
Excellent Economic Prospects
Bahia’s economy is diverse and prosperous as well as growing faster than many other parts of Brazil. It is the sixth richest state in Brazil, with GDP 40% higher than in other Northeast states, such as Rio Grande do Norte - this is where Natal is - where surprisingly, property tends to be more expensive. Similarly Bahia’s GDP statistics are somewhat misleading, as Salvador drags down the regions average.
Recent Economic Statistics:
- Bahia is the 6th largest economy in Brazil.
- Recent GDP growth at 5%, compared with the rest of Brazil at 2.3%.
- Bahia has a GDP of $40bn; this represents 5% of Brazil and 36% of GDP for the Northeast as a whole.
- Agribusiness represents around 32% of GDP in Bahia, this is expanding rapidly.
- Bahia has a larger GDP than Bolivia, Uruguay and Paraguay put together.
- In 2006 Bahia exported $5.53 billion and imported $3.92 billion, showing a clear balance of payments surplus.
Growth Areas:
- Tourism.
- Alcohol and sugar.
- Fish farms.
- Fruit production.
- Floral production.
- Bio-diesel.
- Automobiles – biggest plant in north east of Brazil.
- Precious stones, titanium, iron and zinc.
Foreign Investment:
- Italy 18.2%.
- Portugal 14.9%.
- Spain 13.6%.
- USA 10.4%.
- France 4.8%.
- Germany 4.3%.
- Britain 3%.
Out of $1.8 billion invested between 1991 and 2006 – the main areas have been in:
- Energy $168m.
- Roads $367m.
- Sanitary / sewerage $726m.
- Airports $160m.
- Heritage $174m.
Private investments 1991 to 2020:
- Total investment of $8.2 billion.
- $1.5billion has already been invested, leaving $6.6 billion to be invested until 2020.
- During this period, for every $1 invested in public services, $2.43 has been invested in the private sector.
Main private investments 2006-2010:
From 2006 to 2010, $1.2 billion is to be invested along the Bahian coast, with $750m alone to be invested in the 20km stretch from Itacimirim to Imbassai (North of Salvador). This investment is mainly in hotels and other tourist infrastructure, especially in and around Praia do Forte and its surrounding beaches. This area is the biggest single area for foreign direct investment in the whole of Bahia, and it will eventually eclipse Cancun in Mexico in terms of overall tourist capacity.
Source Bahia Government presentation - Click here to go to this article in Resources.
Underdeveloped Property Market – Get in Early
Brazil’s property market is still at the early stages of development, ensuring potential for years of growth ahead.
Accessibility
Bahia is highly accessible both domestically and internationally. Salvador airport stands proud as one of Brazil’s pre-eminent airports. It has direct access from Europe through airlines such as Air Europa, Air Condor, TAP of Portugal and Air France. This means Salvador is accessible all year round from Europe.
In addition, during the European tourist months, roughly from April – September there are also regular charter flight to and from mainland Europe and the UK. Flight times from the continent are in the region of 8 hours. We have a page dedicated to flights from Europe and the USA, as well as domestic routes. (Link to FAQ - getting to Bahia).
Flights regularly serve Salvador from the USA. Flight times from Miami are in the region of 4 hours.
Domestically two major airports serve Bahia, that of Salvador and Porto Seguro, although there are several other small regional airports for domestic and private planes.
Ideally Situated to Serve the Domestic Market- Unlike the Very Northeast of Brazil
You will find numerous Brazilian property websites offering you a variety of properties and land, but we would encourage all prospective investors to delve a bit further into our competitor’s business models. Many of these companies will try to push you into their own particular developments or have ties to particular developers. Therefore they are looking to make money out of the end sale price of the property or land. We do not operate on this basis. We are purely agents, working solely for a commission which we believe to be the most competitive in the market.
Therefore many Brazilian property sites will try to push you into investing in Natal and the very North East of Brazil. We believe this to be a flawed investment location. Essential to our business model was the choice to become Bahia specialists. On our many exploratory trips to Brazil, we quickly deduced the future of the Brazilian coastal regions property market will be decided not only by the international market, but to a greater degree the domestic tourist market. Bahia is widely seen by Brazilians as the closest exotic coastal area to the South of the country, therefore is both highly desirable and positioned gloriously.
Understand the following. 80% of Brazil’s GDP is generated in the highly populated south of the country, effectively the main cities such as Rio de Janeiro, Sao Paulo and Curitiba, to name just a few. Therefore it is from here that the middle classes are, and will increasingly come from, those with the income and desire to purchase second homes in the coastal areas as well as taking short breaks and holidays, further boosting the local economy. The trouble with the very Northeast of Brazil is that the extra two to three hours of flying time make this a huge turn off to the domestic audience. This in turn presents a problem for investors. Due to the lack of domestic demand, international investors will struggle to off-load their properties, especially considering the area faces chronic over-supply.
Many of Brazil’s Most Attractive Beaches and Beach Resorts
Bahia undoubtedly contains many of Brazil’s finest beaches and resorts. Porto Seguro is Brazil’s number 2 tourist destination after Rio, giving you an idea of the cache Bahia has for Brazilians. Salvador is Brazil’s number two most visited city.
The Bahian coast has its fair share of upmarket destinations, with Praia do Forte, Trancoso and Arraial d’Ajuda among the highlights.
Excellent Infrastructure Already in Place
Bahia was one of Brazil’s first states to welcome and embrace tourism, so by the very nature of this has some of the best infrastructure in Brazil. The World Bank has given Bahia a $16 billion infrastructure grant, as part of a 15 year initiative to attract tourists.
The local government actively supports tourism and development projects throughout Bahia, financing renovation of old airports and construction of new ones.
Booming yet Underdeveloped Tourist Market
Many of the major tourist and hotel groups have, or are setting up shop in Bahia. Much of Bahia suffers from a lack of capacity, but this is being rapidly addressed, with international hotel groups flocking to get a piece of the action.
Bahia’s tourist potential could perhaps be somewhat underestimated, even by the optimists. Unlike most other countries, Bahia has both the climate and the year round accessibility, making it available all year round as a tourist destination, for both the domestic and international tourist market.
Quite sensibly, the operators work it so during the Brazilian summer months, December to March, most of the tourists are drawn from the domestic market, particularly the highly populated Southern cities. From March to November, the operators switch their attention to the package holiday market, drawing in tourists from all over Europe and the USA. Clearly there is an overlap with this, and in our opinion as tourism further develops, the resultant increase in capacity will mean domestic and international tourists will increasingly visit all year round.
In addition, as income rises and mortgages become more available, second homes will increasingly become more common and resultantly many Brazilians will increasingly visit for shorter trips, such as weekend breaks. The same applies to foreigners who are increasingly buying holiday homes and investment properties.
As Salvador becomes more prosperous itself, many city dwellers will increasingly have the means to buy places on the coast, either as a weekend retreat, or as a base from which to commute.
With Brazil rapidly coming to terms with its potential for tourism and the boost this could be to its economy, it has set up a tourism board – EMBRATUR – to champion and promote its case abroad. It already has 8 offices around the world and is looking to expand rapidly, tapping into the demand for exotic long haul tropical locations with enhanced spending powers.
Bahia – Tourism Statistics and Projected Numbers of Visitors (2005-2015)
Projection (6% per year.)
Total number of visitors
(In 1000's)
| Year | Bahia | Salvador |
| 2005 | 5,092 | 2,371 |
| 2006 | 5,347 | 2,490 |
| 2007 | 5,614 | 2,614 |
| 2008 | 5,895 | 2,745 |
| 2009 | 6,190 | 2,882 |
| 2010 | 6,499 | 3,027 |
| 2011 | 6,889 | 3,208 |
| 2012 | 7,303 | 3,401 |
| 2013 | 7,741 | 3,605 |
| 2014 | 8,206 | 3,821 |
| 2015 | 8,698 | 4,050 |
Source: Bahiatursa, 2005
Unrestricted Property Ownership and Security of Investment
Brazil is legally robust, politically stable and most of all welcoming to foreign investments, hence there are no restrictions on property ownership to the domestic or international audience alike. All property in Brazil is freehold.
Deception and fraud can be prevalent in all property markets, but fortunately Brazil suffers very little of this, and most importantly we will ensure you are guided through all steps of the process and get full and comprehensive legal advice – this is our policy.
Unlike many other parts of the world, Brazil is a relative safe-haven for investment. It suffers, no hurricanes, tornados, tsunamis, volcanoes or social unrest. Although Brazil’s major cities have a reputation for crime, this is not symptomatic of the country as a whole, and is often misunderstood anyway. Much of this is inter-gang rivalry in the shanty towns or favellas of the big cities. (See section on crime in FAQ).
With all the reasons listed above, Bahia offers excellent potential for renting your property, as and when you require this. Unlike many other countries, the all year round tropical climate means there is never a bad month to be in Bahia. With tourism predicted to increase both domestically and internationally, prospects for rentals only look set to improve. Brazil Bahia Property will happily advise you on all aspects of rentals, and we will happily endeavour to rent your property out for you. (link to rentals in our services).
Fantastic Culture, Lifestyle and People
Whether you like the laid back lifestyle or party culture, Bahia has the best of both worlds. Famed for its laid back atmosphere and beach culture, Bahia also boasts a world renowned carnival, the largest street party of its kind anywhere in the world. Bahia’s numerous coastal resorts and villages provide scope to sit back and enjoy the vibe, or to immerse yourself in the musical delights and party like the Brazilians into the early hours!
Plenty to Do and See
Bahia is laden with activities and places to see. From diving amongst the beautiful coral reefs, limitless beach activities, trekking, horse riding, inland river trips, fishing, deep sea fishing, jungle trips, beautiful scenery, exotic colonial towns, untouched fishing villages and amongst all welcoming and hospitable people.
Favourable Tax Regime
If you sell your property after five years, you are automatically exempt from capital gains tax. Before this a capital gains tax of just 15% is levied, although this can be avoided by re-investing in another property in Brazil.
Cheap Construction Costs
To generalise, prices of construction can be well below half of the cost of building in Europe or the USA. Brazil Bahia Property will guide you through all aspects of development and construction. Please contact us for further information.
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