VTMBH Article: Body
The overvaluation of the Brazilian real is causing dissatisfaction among many Brazilians residing in the United States, the opposite of conventional wisdom. Many with busness here already see a slowdown in sales and find it impossible to make investments in Brazil.
Ironbound, on the east side of Newark, is a typical immigrant neighborhood where Brazilians, Portuguese, and Latinos live. The local businesses suffered a significant reduction in sales.
The information technology sector alone has registered a slide of 35 percent in sales. Fernando MacDonwel, an employee of retailer Ez-Tech, says that her products really stopped moving in the last two weeks. The reason for all this can only be rise in the dollar compared to the Brazilian real. Everyone is saving their money to send it to Brazil, MacDonwel complains.
At the beauty shop, receipts dropped 15 percent. The ladies have given up beauty and have started saving instead, says Juca, at Salon Brasil.
To prevent more losses, for the last three months Fino Joalheiro changed his entire business strategy. A one-time wholesaler, he changed his investment strategy focus only on retail. Im not feeling it too much because I took some preventive measures. But that said, in all my 18 years in the United States, this is one of the worst slowdowns in business, he says.
Alongside manufactured goods, the food service sector has failed to escape unharmed. For waiter Marcos Chaves, of the churrascaria Boi na Brasa, customers, delivery orders, and even tips have taken a hit. Deliveryman Claúdio Soares confirmed the slowdown. Weve gone from $160 per night in deliveries to $100, he said. Soures and Chaves havent benefitted form the rise in the dollar, like those who took advantage of the exchange rate by plowing their money back into Brazil. The rise in the dollar doesnt help anything. Here, our sales are down, and we cant send money abroad, they say.
<b>The other side of the coin. </b>
Chaves was right when he mentioned in passing that many Brazilians in the United States have stopped living wellfor example, eating outto buy apartments in Brazil. While those who depend on the Brazilian consumer have ceased to prosper, others have taken advantage of the jump in the greenback and have started making deals in reals.
The number of Brazilians investing in Brazil doubled over the course of three months ago, estimated Newark real estate consultant Luciana Moreira. Moreira works with a network of direct financing for developers who then do not have to make an individual declaration of income for tax purposes.
Moreira generally works with young investors, from the lower-paid working class (nannies, cleaning ladies, etc.), whose goal one day is to return to Brazil for good. In most cases, the preference of these Brazilians is to buy apartments in the coastal cities, where the potential for a good return is greater.
During negotiations, investors can hire an agent, who acts as a proxy and advertises the property to tourists. This is a way to make things easier on Brazilians living here [in the U.S.], who want to do business but cant come and go to Brazil as they please, Luciana explains.
In the long term, when generally it is more expensive to rent apartments along the beach, they can earn upwards of R$8-9000 per year, according to Moreira. The exchange of money is generally made after the season, with 10 percent going to the agent (thats the going rate for real estate agencies).
Because apartment prices are based on the Brazilian currency, the rate of exchange with the dollar has favored real estate buyers. At present, with less than U.S.$10,000, one can buy a R$40,000 apartment that would have cost US$20,000 four months ago.
Investors start with a high down payment and then make reduced payments for 62 months. These fixed payments are also calculated in reals. This has attracted the Brazilian investor, and it is obvious that he has stopped spending here [in America] in order to invest down there [in Brazil]. I have some clients who until now have been saving up for a piece of real estate. Others are even buying two apartments. What every Brazilian wants is to make sure he lives with a steady income, Moreira concludes.
Ironbound, on the east side of Newark, is a typical immigrant neighborhood where Brazilians, Portuguese, and Latinos live. The local businesses suffered a significant reduction in sales.
The information technology sector alone has registered a slide of 35 percent in sales. Fernando MacDonwel, an employee of retailer Ez-Tech, says that her products really stopped moving in the last two weeks. The reason for all this can only be rise in the dollar compared to the Brazilian real. Everyone is saving their money to send it to Brazil, MacDonwel complains.
At the beauty shop, receipts dropped 15 percent. The ladies have given up beauty and have started saving instead, says Juca, at Salon Brasil.
To prevent more losses, for the last three months Fino Joalheiro changed his entire business strategy. A one-time wholesaler, he changed his investment strategy focus only on retail. Im not feeling it too much because I took some preventive measures. But that said, in all my 18 years in the United States, this is one of the worst slowdowns in business, he says.
Alongside manufactured goods, the food service sector has failed to escape unharmed. For waiter Marcos Chaves, of the churrascaria Boi na Brasa, customers, delivery orders, and even tips have taken a hit. Deliveryman Claúdio Soares confirmed the slowdown. Weve gone from $160 per night in deliveries to $100, he said. Soures and Chaves havent benefitted form the rise in the dollar, like those who took advantage of the exchange rate by plowing their money back into Brazil. The rise in the dollar doesnt help anything. Here, our sales are down, and we cant send money abroad, they say.
<b>The other side of the coin. </b>
Chaves was right when he mentioned in passing that many Brazilians in the United States have stopped living wellfor example, eating outto buy apartments in Brazil. While those who depend on the Brazilian consumer have ceased to prosper, others have taken advantage of the jump in the greenback and have started making deals in reals.
The number of Brazilians investing in Brazil doubled over the course of three months ago, estimated Newark real estate consultant Luciana Moreira. Moreira works with a network of direct financing for developers who then do not have to make an individual declaration of income for tax purposes.
Moreira generally works with young investors, from the lower-paid working class (nannies, cleaning ladies, etc.), whose goal one day is to return to Brazil for good. In most cases, the preference of these Brazilians is to buy apartments in the coastal cities, where the potential for a good return is greater.
During negotiations, investors can hire an agent, who acts as a proxy and advertises the property to tourists. This is a way to make things easier on Brazilians living here [in the U.S.], who want to do business but cant come and go to Brazil as they please, Luciana explains.
In the long term, when generally it is more expensive to rent apartments along the beach, they can earn upwards of R$8-9000 per year, according to Moreira. The exchange of money is generally made after the season, with 10 percent going to the agent (thats the going rate for real estate agencies).
Because apartment prices are based on the Brazilian currency, the rate of exchange with the dollar has favored real estate buyers. At present, with less than U.S.$10,000, one can buy a R$40,000 apartment that would have cost US$20,000 four months ago.
Investors start with a high down payment and then make reduced payments for 62 months. These fixed payments are also calculated in reals. This has attracted the Brazilian investor, and it is obvious that he has stopped spending here [in America] in order to invest down there [in Brazil]. I have some clients who until now have been saving up for a piece of real estate. Others are even buying two apartments. What every Brazilian wants is to make sure he lives with a steady income, Moreira concludes.