IL Postcard

The Next Brazilian Hotspot…but Hurry

Date: 08/01/2008 Author: Ronan McMahon

Saturday, Aug. 2, 2008

Read more about Fortaleza, Brazil, in International Living Postcards—your daily escape

Dear International Living Reader,

Cumbuco is my favorite little beach town along the northeast coast of Brazil. This was the place I came to relax and spend time on a free day during a recent 540-mile scouting mission. I have just returned from my second scouting trip to Cumbuco. On the face of it, not much has changed.

This is a little beach town 30 minutes west of Fortaleza. When I was there, it was 84 degrees Fahrenheit...with a cooling breeze coming in off the ocean. A very relaxed beach-town vibe here. Cumbuco has an Internet café, hotel, and several guest houses, but it's still a local town, kids playing soccer…cobbled streets…

Although it’s a relaxed little beach town at the moment, it is so close to the city and has such great beaches that I think it won’t be long until the foreign market arrives. Norwegians are the only foreigners buying around here right now, but once North Americans discover this town, I think it’s going to boom, big-time.

Since January, I have been telling IL readers how major European developers and investors had been quietly snapping up pieces of land for major resort development on the stretch of coastline around Fortaleza. A mere six months later, it’s not so quiet anymore. New developments are springing up everywhere, and Cumbuco will be the first area to the west of the city to see major development.

Word is out. A major Portuguese resort and golf course developer Vila Gale has just started construction of its golf course. The project, Cumbuco Golf, will include five-star hotels in the 450-hectare site. Next door, a Spanish group has launched a 990-unit project. The Spanish group’s neighbor is a project by a major Brazilian group of 1,400 units. These major developers will seriously raise the bar in the area, and their marketing budgets and muscle will sell Cumbuco to a whole new market.

In five years' time, this sleepy beach town will be barely recognizable. Soccer-playing kids will compete for space on the cobblestone streets with foreigners browsing in the shops or on their way to dine in the new restaurants that will open during the boom. Golf carts carrying golfers will be as common a sight as dune buggies carrying windsurfers.

Visitors will come in droves to these new resort properties, invading what is now this sleepy little town. Little houses in the town center will be converted to cafés, restaurants, bars, and boutiques. Very soon they will have a commercial value that they don’t have today. Buy one of these little houses in a central location and look for prices to double in the next three years.

As the town develops, more foreigners will want to have it all: be right on the beach and a short stroll to the buzz of the town center. Beachfront sites within proximity to the town center will be snapped up for their development potential. I expect beachfront condo prices within the town center to appreciate by 50% over the next three years.

I visited the site for one such beachfront condo project on my last two trips. This beachfront development will be on the site currently occupied by a beach bar. I went to this bar and saw the views that these condos will have. This is true beachfront with pristine sand from your door to the ocean. This project will have 16 two-bedroom units on four stories. The prices are $235,000 to $265,000, but the first eight units will be sold with a pre-construction discount of up to 30% for buyers who pay the full purchase price upfront (these have just been released, and one unit is already gone). The list price matches with other real estate I saw in the area, so that pre-construction discount is genuine.

Ronan McMahon

P.S. I also met the builder who has 25 years of experience in Fortaleza, and who has been building small projects in Cumbuco for the past couple of years. I visited a project he has completed and was impressed with his work. Real Estate Trend Alert members can get full details of this project here. Not a RETA member? Sign up here.

Read related IL Postcards:

- Piping-hot Pre-construction Deals on Brazil’s Northeast Coast

- The Inside Scoop on Brazil’s Bargain Real Estate

- Check out This Beach View