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Sao Paulo is one of the world's most vibrant cities - and one of the most violent. Is it a safe bet for British property investors? We showcase some of Brazil's more peaceful alternatives. Andrew Downie reports
Among all the world's megacities, Sao Paulo is the ugly sister. It has none of the colonial charm of Mexico City, the futuristic buzz of Tokyo, the cosmopolitan awe of New York or the colourful chaos of Bombay. And it lacks the sex appeal of its fellow Brazilian giant, Rio de Janeiro - not only because of the jarring sprawl of high-rise apartments and low-lying slums once sniffily dismissed as being "just like Birmingham with skyscrapers".
Sea change: the setting for The Plantation, a new development of luxury villas to be built on the coast near Belmonte. Details from Colliers CRE
But dig a little deeper and you will find many reasons why it merits a place on the list of metropolitan greats. It hosts much of Brazil's industry and is home to many of its best artists, scientists and musicians. It is the financial capital of the southern hemisphere, with arguably the best nightlife on the planet. Greater Sao Paulo's conglomeration of 39 municipalities is a melting pot where design, sporting and gastronomic excellence come together to create a vibrant and fascinating city that has long since displaced Rio as the true heart of Brazil.
Paulistanos, as people from the city are called, have always known that their home is special. But now outsiders, too, are starting to take note - among them Britons looking for a lucrative, second-home investment.
Grosvenor, the London-based property company, recently declared Sao Paulo to be one of the 21st century's boom towns. Asked to name five future hotspots from around the globe, Grosvenor cited the city as a front-runner, along with Shanghai and the southern California corridor between San Diego and Los Angeles.
Anyone looking to buy property in Sao Paulo has a wealth of options. The city is crammed with flats and houses, and its environs boast small ranches, weekend villas and beach homes, 90 minutes away by car. What's more, supply currently outstrips demand, which means bargains are readily available. "There are a lot of properties on offer - the construction companies just don't stop building," says Valentina Caran, owner of one of the city's biggest property agencies. "And no one pays the asking price. You can always negotiate down."
advertisementBritons looking to buy in the city have a choice of properties similar to that of London at a fraction of the price. For Sao Paulo is a city comprising hundreds of small neighbourhoods, each with their own identity. Leafy Higienopolis has many well-preserved, modernist buildings from the 1950s; Pacaembu has glorious old houses with verdant gardens; the bohemian streets of Pinheiros and Vila Madalena are lined with small, terrace houses, with bars and restaurants on almost every corner; and upmarket Jardim is a paradise for shoppers and gourmets.
Prices are generally cheap compared not just to Britain but also to Rio, a 45-minute flight away. Three-bedroom apartments go for anything between about £105,000 and £185,000 in Pinheiros or overlooking Avenida Paulista. Or you can get a two-bedroom apartment in the heart of Jardim for less than £40,000.
Because Sao Paulo is so built up, flats are more common than houses but most come with their own garages and security. Many have swimming pools and play areas for children and some even have gyms and saunas. Such modern condominium complexes can be found all over the city, and many more are springing up in areas such as Barra Funda and Lapa, old, industrial neighbourhoods now being cleared of factories and warehouses.
Economically, Brazil is on the up. Its finances have finally stabilised after years of boom and bust, interest rates have fallen from about 20 per cent to 15.75 per cent and inflation is under control. High rates once meant that those who could get mortgages had to pay them back quickly, often in as little as five years, and most people couldn't afford that. Consequently, only 22 per cent of Brazilian home and business owners have a mortgage on their property, compared to more than 70 per cent in Europe and the United States.
That is now changing - and with it, the state of the property market. More mortgages will shake up the market. Accessible credit will allow people to buy more property and do up the places they have. The resulting transformation, not to mention the gentrification of large parts of the city, will gradually turn Sao Paulo into a more pleasant and sophisticated place.
"With this investment you have the renewal of urban areas," says Andrea Calabi, a Berkeley-educated economist who once served as the city's planning secretary. "The changes will be continuous."
Sao Paulo is not a city with construction sites on every corner and probably won't be, urban planners say. With about 19 million people, there is not a lot of room for horizontal growth and most changes will come vertically and qualitatively, except in the rundown city centre, where about 20 per cent of all buildings are empty and hundreds of empty lots function as car parks. (There are fantastic bargains to be had for anyone willing to bet on the centre's rejuvenation.)
There are downsides, of course.
Sao Paulo is an 11-hour flight from London and can feel very distant geographically, linguistically and culturally. The city can be hard to get to grips with at first, with the roads confusing and the traffic often infuriatingly slow. Above all, violence and organised crime remain major concerns.
City officials acknowledge that the endemic violence is the city's Achilles' heel, but insist that it won't prevent progress. Brazil has always been violent, they say, and those investing in the property market are well aware of what they are getting into.
advertisement"You can't ignore questions about security," says Francisco Vidal Luna, Sao Paulo's planning secretary. "But everyone knows these questions exist and decisions on property aren't affected by them. If you consider that, in Sao Paulo, services are improving, land is cheap, and there is financial stability, you can see that our time is coming."
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