Sao Paulo tipped as boom town in waiting
ONE of Brazil's impoverished, crime-ridden cities has been tipped to become a 21st century boom town by Britain's richest man.
And while the Duke of Westminster's views will raise eyebrows around the world, in Sao Paulo they are already seeing the signs of the good times ahead.
"It is no coincidence that he would say that," said Candido Malta Campos, a well-known city planner. "We all believe that Sao Paulo is going to enter a new stage of development as a big international city."
Although a spokesperson for the duke's property company Grosvenor stressed the Duke's comment was not a tip to buy, his message was clear - South America's biggest city is catching the eye of international property developers, along with Shanghai and the southern California corridor between San Diego and Los Angeles.
"The Latin American giant's famous 'favelas' are already seeing signs of change. The chances are that the topography of the city will morph into a more structured format, precipitating a natural process of regeneration helped by external investors," said the spokesman for Grosvenor, which has 9.1bn in worldwide assets.
Investors are motivated primarily by Brazil's unusually stable finances, experts agree. Although the economy is not growing as quickly as many would like, interest rates have fallen, inflation is under control and the real has just hit a five-year high against the dollar.
Until now, high interest rates meant those given mortgages had to pay them back in as little five years. Most, however, couldn't afford even that option and only 22% of Brazil's property owners have a mortgage, compared to more than 70% in Europe and the US.
That will change because interest rates are falling, the government is stimulating housing investment, and banks are taking advantage of a law that makes it easier to force out anyone behind on their payments.
Greater Sao Paulo, however, will never have construction sites on every corner, planners said. With some 19 million people in 8,501 sq km, most changes will come vertically. One exception could be the rundown city centre, where hundreds of empty lots function as car parks and where around 20% of buildings are empty.
Further afield, however, work has begun. New roads and tunnels have been built and public transport modernised.
But more attention must be given to the favelas and the city's housing deficit. One million people have no home of their own and another one million live in substandard accommodation. Perhaps most crucially, unless the city makes plans to accommodate 5.5 million cars, a figure that grows by 300,000 to 400,000 a year, its notorious gridlock could prove fatal.
City officials believe such problems are surmountable, as are the perennial questions of security. "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," said Francisco Vidal Luna, Sao Paulo's planning secretary.
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