As a growing port city, Recife boasts one of Brazil’s most popular beaches with boardwalk properties fetching premium prices. Despite having one of the highest crime rates in Brazil, Recife continues to attract real estate investors eager to capitalize on the city’s status as a growing business center and popular tourist destination. See the following article from Pathfinder International for more on this.
I approach every destination with an open mind, regardless of whatever stereotypes may be out there. And I report on every destination, whether my findings were good or bad. I came across two facts repeatedly when I researched Recife: neither of which was good. Recife, it appears, suffers from a high crime rate…and sharks. But undaunted, I went anyway to live there for over a month.
Recife is one of Brazil’s largest cities, and the capital of the state of Pernambuco. Gleaming condo blocks line the fashionable boardwalk in Boa Viagem. Property prices here run between 5000 and 7000 reals per meter ($2915-$4081). Boa Viagem’s condo owners drive around in top of the line cars, dressed in designer clothes. Reports of the crime rate and the sharks have not deterred them from making Recife their home.
There are a number of reasons for Recife’s popularity. Recife is a growing city. There are two ports: the city port, and the expanding Suape port which houses a Petrobras refinery and a large shipbuilding company. Suape port moves 8.4 million tons of cargo yearly. New warehouses and storage facilities are under construction in the port area.
Recife is the foremost business center in the state of Pernambuco, with more than 85,000 business enterprises in the metropolitan area. It’s a center for medicine (second only to São Paulo in importance), with 417 hospitals and clinics, drawing patients from neighboring states. There’s an area called Porto Digital (Digital Port), specializing in software manufacturing, and home to businesses like Samsung and Sun Microsystems. The regional headquarters of IBM and Microsoft are in Porto Digital, too.
All of these industries attract blue-collar workers and middle-class professionals, who prefer homes close to where they work.
Many tourists stay in Recife while visiting Olinda, one of the best-preserved colonial cities in Brazil. It’s a UNESCO World Heritage Site, and hosts one of the best Carnival celebrations outside Rio. Olinda’s plazas are fun for spending the day, shopping at the handcraft market or dining in one of the family-run restaurants. The views of historic buildings, the ocean, and the Recife skyline from the hilly streets of Olinda make for perfect photos, too.
And Recife is also popular for its beaches. The beach at Boa Viagem is the longest stretch of urban beach in Brazil, at five miles. It’s busy most days, particularly on weekends.
And if Recife’s city beach is not enough, the nearby town of Porto de Galinhas offers natural pools, and upscale resorts and hotels. It’s 60 km (37 miles) south of Recife, and regularly voted Brazil’s top beach.
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Recife also boasts a cultural center, museums, a theater, a giant water park, nature reserves and parks. You’ll see the city’s affluence in the designer stores in Boa Viagem. The supermarkets here stock more imported gourmet luxuries than the average Brazilian supermarket.
That combination of industry and business, and a good tourist infrastructure, is why Recife prospers… despite the crime and the sharks.
A look at Recife’s property market
Prime boardwalk properties fetch premium prices, and there’s a shortage of development land in the boardwalk area. One name you’ll notice on many of the buildings is MD, Moura Dubeux, the developers of Beach Class Colonial in Fortaleza. Recife is MD’s home base, and where they have constructed most of their eighty projects to date.
I went to see Pier Maurício de Nassau, two towers in an up-and-coming area of the city. The ocean views from the front units were awesome, the traffic on the road below reduced to dots, from the 35th floor. Unit prices here increased an unbelievable 233% in the three years during the construction period. The apartments are large, at 247 square meters (2650 square feet). As you can see, Brazilian families prefer larger apartments.
Much to my surprise, something else Brazilians favor is apartments close to shopping centers. Back in Ireland or the UK, up-market buyers definitely don’t want to live beside a giant shopping mall. I saw one development, close to Brazil’s largest shopping mall. The show unit was designer heaven, a vision of luxuriously elegant living spaces…and most units have already sold.
Moura Dubeux’s Beach Class Suites in Recife are an example of a perfect short-term rental, averaging 86% occupancy year-round. A hotel group, Atlantica Hotels, manages the rental of Beach Class units. Beach Class’s smaller unit sizes and hotel-style amenities successfully cater to Recife’s high numbers of business travelers. Two more Beach Class projects are underway.
There are fewer foreign buyers in Recife than in Fortaleza, where foreign buyers only average 2% of total buyers. Locals buy apartments as homes in Recife, and families from the interior of the state looking for a weekend home on the beach, also buy here. Investors buy pre-construction apartments as an investment. The price increases to date during construction have rewarded buyers handsomely.
There are investment opportunities in social housing in Recife that looked interesting. And commercial property also looked appealing. Exame, Brazil’s equivalent of The Economist ranks Suape port as a prime investment spot. There are opportunities with pre-construction industrial warehouse space, and raw land acquisitions that would appeal to investors.
The view from on the ground
My first impressions were not good. Arriving late afternoon on a Sunday, the beach at Boa Viagem (one of the city’s best features) was emptying of sunbathers…and filled with their garbage.
Then I noticed the signs…
I’ve never seen signs on a beach advising you not to swim, or that ban surfing. The signs emphasized these points with a graphic depiction of a shark, as if to remove any lingering doubts you might have.
I investigated the crime rate, and you can’t argue with the statistics. Recife is one of Brazil’s most violent cities, ranked worse than Rio or São Paulo.
And you can’t argue with the sharks, either. There were forty-seven recorded shark attacks since 1992, sixteen of which were fatal.
I e-mailed a colleague that night, saying he was right…I hated Recife already.
Yet a million foreign tourists visit Recife every year, and properties in the trendiest locations remain in demand, even with the relatively high prices.
As it turned out, I loved spending time in Recife…and it gave me some interesting insights into Brazil’s property market. But I wouldn’t buy residential property here. Firstly, I simply didn’t feel safe enough outside Boa Viagem’s boardwalk area. And my husband resented being on a great beach, but not being able to swim. Combined with the high property prices, I’d give Recife a “miss”, unless I were relocating here for work.
Next week, I’m traveling to a promising location. I believe it has Boa Viagem’s style…with lower prices, and without the sharks. Stay tuned.
Editor’s note: The prices in this report are based on an exchange rate of R$1.715 Brazilian reals per US dollar.
This article has been republished from Pathfinder International. You can also view this article at Pathfinder International, an international real estate analysis site.