The right time to invest in a property off-plan has arrived: discover the advantages of this option

With high interest rates, losses in the financial market and imminent real estate appreciation, investing in a property off-plan is the best decision for those seeking long-term asset security.

One of the most recurring themes when it comes to the Brazilian economic scenario, which is currently going through a period of turbulence, with rising interest rates, combined with a very unstable international scenario, still under the effects of the pandemic and, above all, the war in Europe, is undoubtedly how and where to invest financial reserves, maintain their profitability and purchasing power and also protect assets, given the challenges of an economy that is increasingly unstable and hostile to financial investments. And, among the alternatives, without a doubt, is investing in the acquisition of a property under construction is one of the most sought after at the moment.

In this article, we will help you better understand this type of purchase and how it can guarantee long-term asset security, by protecting your reserves and guaranteeing the expected financial return, amid the current financial market turbulence.

But, after all, what is a “property on the plan”?

The call “property under construction” is, in fact, a term popularly used in the real estate market in general, to define the type of purchase of properties acquired from a construction company or developer. Real Estate Development, in Brazilian law (Law 4,591 of 12/16/1964), is the name given to the set of activities carried out with the purpose of constructing or promoting the construction of buildings or sets of buildings, as well as their marketing, in whole or in part, composed of autonomous units that, together, form a condominium. A Real Estate Development is, therefore, composed of three essential elements:

The Land: the area designated for the construction of the project;
The Developer: in general, the company that will be responsible for planning, managing and delivering, within the deadline, price and conditions determined, the completed works to future residents purchasing the autonomous units;
The Construction Company: Responsible for executing the project within the conditions and deadlines established by the Incorporation contract.

Once the standards set forth by law have been met, the project has been approved by the competent bodies and the appropriate RI – registration of the incorporation memorial with the real estate registry office, the Developer may now market the autonomous units of the project, through a promise of purchase and sale agreement, also beginning the works which, at the end of the established term, must be delivered to the appropriate owners, who will form the project's condominium.

And why is investing in a property off-plan at this time the best choice?

The answer to this question includes three essential aspects that are present in every decision to purchase an off-plan property:

Achieving your dream property, in a planned and easy way:

Buying the ideal property is one of the most important journeys in a Brazilian's life. Planning involves complex decisions ranging from subjective issues such as: security, preferences and lifestyle, to more objective questions, such as location, construction standard and, mainly, those of an economic and financial nature, as it is often an investment for life. Being able to choose the ideal property, in advance and fully planned, that best fits the expectations and needs of the entire family, both in relation to location and architectural design, with more optimized, reversible, intelligent and functional environments and plans, as well as accessibility differentials, security, construction processes, leisure and technological innovations, which add modernity, comfort, moments of family life and economy to the style of living and living, in a city like Brasília and still, being able to make this choice, enabling a payment schedule and advances, during the construction period, until receiving the keys, which best fits the family budget, is the dream of everyone who seeks to invest in a property for life.

Main facade perspective – Residencial Turmalina – 04 suites – SQSW 500 – Southwest Sector

Floor plan of the middle apartment of Residencial Turmalina, in Sudoeste – Option with reversibility and gourmet kitchen

Showroom of coatings and construction differentials – Emplavi Sales Center – Northwest Sector

2.Investment in off-plan property X Investment in the financial market:

There is much talk about this often antagonistic relationship between the financial market and the real estate market. The core of this discussion lies in the interpretation that the investor, be it a professional capital market analyst, a bank manager or even a relative or friend who is starting to invest in the stock market, makes of the two scenarios, ultimately opting for the investment that, in his or her view, is the best alternative.

The greatest example of this reality is what happens, for example, in IBOVESPA, which has been accumulating losses over the last 12 months, following fluctuations both on the global and domestic scene.

Another example, and the most relevant at this moment, is what we are following in relation to the basic interest rate – Selic – which is currently at a very high level, 13,25% per year. In this scenario, investments in fixed income funds, for example, can become a tempting alternative for those seeking to protect themselves from inflation, maintain purchasing power and negotiate the future purchase of a property, when it is ready, in 2 or 3 years, at a more advantageous price at the time.

However, the most important calculation, which is often overlooked, is: how much could this property cost in 2 or 3 years, when it is ready? The truth is that, in the last 12 months, the real variation of the main inputs for civil construction, such as aluminum, steel and cement, commodities quoted in dollars on the international market and highly impacted by COVID-19 and the war in Ukraine, were around 30% higher than the variation of the IPCA (Inflation) and the INCC itself in the same period.

Although this difference is currently being absorbed by the construction sector, at some point in the coming months, this difference should be systematically passed on to the real value of new properties, especially taking into account the demand that continues to accelerate, to the detriment of the number of new launches that has decreased again, especially towards the end of 2022.

On the other hand, those who have reserves at this time to anticipate financial contributions during construction will be able to benefit from special discounts, commonly called “Attractive Rate”, making the investment even more advantageous, depending on the time left until delivery of the negotiated property.

In short, the scenario is that the inflation update (INCC) will not be enough to compensate for the current gap in the value of new properties. Those who buy now and still have resources to anticipate values during the construction period, in addition to a very advantageous condition in the purchase, will be able to avoid the financial updates of the period (INCC + correction in the real value of the property) and still gain in real estate appreciation in the long term, which makes this moment a very attractive window to invest in the purchase of a property off-plan.

3. The future: property appreciation, solidity and asset security

The best news, however, may still be yet to come: the appreciation that the property under construction may occur during the construction period. There are many factors that can accelerate this appreciation, such as location, typology, construction standard and differences, leisure items, neighborhood, as well as economic and market variables that are always impacting the real estate market, as we saw in the previous item.

Within this context, once ready, the property under construction may accumulate a higher appreciation compared to the amounts paid by the investor during the construction period, since these amounts are subject only to variations in the sector index (INCC) which, in most cases, does not follow the appreciation that the property adds in the same period. An example of this is the new neighborhood of Brasília, Northwest Sector, which is currently the neighborhood with the greatest potential for appreciation in the coming years, since the demand for this, which is the first ecological neighborhood in Brazil, is increasingly greater and the value of m² there is still below the value of m² of new properties in other upscale neighborhoods of Plano Piloto, such as Asa Norte and Setor Sudoeste.

Main considerations when choosing the “off-plan property” of your dreams

It is important to emphasize once again that the suitability, history of solidity, safety and construction quality of the Developer responsible for the project is a determining factor for the success of any project that aims to achieve the property under construction ideal, thus ensuring, in the long term, not only the best investment but, above all, the desired asset security

Therefore, it is of fundamental importance that the decision to purchase a property under construction be preceded by careful research into the developer responsible for the project, its financial health, its history, the works it has already delivered and, above all, the commitment it has proven to have with its clients and with the city in which it has developed its projects throughout its history.

Finally, buying a property off-plan can represent the biggest and most important deal of a lifetime. It is a long-lasting relationship between the buyer and the developer and, therefore, it must be permeated with all possible trust and security for the smooth running of this long journey until the realization of the dream of living in the property of a lifetime.

Emplavi: Building happy stories for 40 years

THE Emplavi, a leading developer in the high-end real estate segment, with the largest and most diverse range of high-end properties, in the best locations in the Federal District, with 40 years of history and more than 30 thousand properties delivered, it is a genuinely Brasilia-based company that has evolved with Brasilia since 1982, in the planning, marketing, construction and delivery of properties that prioritize the safety, comfort and quality of life of its customers, the result of a perfect harmony between planning, qualified management and high added value construction processes, resulting in projects that, over time, have become a reference in the high-end real estate segment in the Federal District.

Learn more about Emplavi here. Are you interested in buying a property off-plan? Choice an Emplavi. Discover the latest releases Emplavi node Noroeste, Sudoeste, Águas Claras and Guará:

Castanheiras Park – 3 suites – SQNW 102, Northwest Sector