March 21, 2014 6:36 pm

Florianópolis lures buyers away from Brazil’s megacities

Tech start-ups are among those swapping pylons for palm trees and setting up shop by the sea
Beach near Florianópolis©Antonino Bartuccio/SIME/4Corners

A beach near Florianópolis

Blitzing a superfood concoction from the plum-coloured berries on her Jabuticaba tree – native to southern Brazil – Ana Cristina da Luz doesn’t miss her corporate commuting days in São Paulo. “I’d sit in hellish traffic for hours to get into work; this morning, I cycled along the seafront,” she says, before she headed out to her yoga studio.

Ana, in her mid-thirties, is not the only one swapping pylons for palm trees: tech start-ups are increasingly moving away from Brazil’s sprawling and polluted megacities to set up shop by the sea in Florianópolis – or Floripa, as it is called by the locals. Indeed, the local municipality estimates 40 IT companies open or migrate to Florianópolis each year, with almost 600 tech companies already based there.

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Linked to the mainland by a suspension bridge, Florianópolis is the capital of Santa Catarina state and lies on a 33-mile long island that is home to 400,000 people and is made up of 17th-century fishing villages, jungle-covered hills, emerald lagoons and dozens of pristine white-sand beaches. The city is located between mainland Brazil and the rest of Santa Catarina Island, and is roughly 450 miles southwest of Rio de Janeiro and an hour’s flight from São Paulo.

Today, gross national income per capita in Santa Catarina is more than a quarter higher than the Brazilian average, at $14,663 (R$34,333) versus $11,720 nationally, while youth illiteracy is almost non-existent at less than 1 per cent, the lowest in Brazil.

Florianópolis became established as a desirable tourist destination and key Brazilian property market in the late 1990s with the development of Jurerê International beach resort. This project in the north of the island was designed to spur growth, unlike other smaller towns and cities along the coast that grew exponentially as populations increased.

“By Brazilian standards, Floripa is really quite well planned,” says João Paulo Silva Galvão, director of Brazilian property developer Lopes Sul. Planning rules outlaw high-rise developments in many of the coastal areas – hardly surprising when you consider that two-thirds of the island is a nature reserve. “I first started to see international interest about 15 years ago, mainly Americans who had already travelled extensively in Brazil,” says Galvão.

Map of Florianópolis, Santa Catarina, Brazil

More recently, Florianópolis’s fame has spread to Europe. Growing numbers of Swiss and Italian second-home buyers have gathered around Praia Mole on the east coast, known for its surfing, whale watching and oceanfront bars.

A five-bedroom 550 sq metre modern family home with a whirlpool, games room and large tropical garden is on the market for $1.1m through Lopes Royal. Still, the average price for residential property was among the lowest of the 16 major Brazilian cities surveyed in 2013 by the FipeZap real estate index, at $1,941 (R$4,620) per sq metre.

The island’s population can double during the summer months and, unsurprisingly, holiday rental prices soar. A short-term let for a five-bedroom Spanish style villa can cost up to $3,500 a day from December to February through Oasis Collections, an upmarket rental service with a presence across nine key Latin American destinations. Year-round residents often choose to live in the city centre or on the mainland where a modest three-bedroom apartment ranges from $170,000 in Palhoça, to $300,000 in downtown Florianópolis.

In the northwest of the island, just a ten-minute drive from the city centre, local agent Garapuvu is offering a waterfront property set across three floors, with private beach access, a jetty and an infinity pool, for $2.3m (R$5.5m). While a mansion with its own helipad, party room, five balconies and a large private pier will set you back $6.6m through the agent Imóveis Florianópolis JB.

Jurerê resort on the northern tip of the island continues to pull in wealthy second-home buyers, primarily from Curitiba and Porto Alegre, both World Cup host cities later this year. In 2013 the average price per sq metre was the third most expensive in all of Brazil, up to $4,497 (R$10,700), according to data collected by Lopes Royal, figures beaten only by high-end neighbourhoods in Rio de Janeiro and downtown São Paulo. A spacious three-bedroom apartment located 200 metres from the waterfront is on offer with Directa Imóveis for $625,000.

Most of the area’s premium homes were bought without mortgages before finance was readily available and vendors have always been able to sit tight until they achieved their full asking price.

Outside the resort, average prices have remained pretty flat, rising by just 1.4 per cent in 2013, compared with 14 per cent nationally, according to the leading property search engine Zap Imóveis.

“Only a small number of areas saw an increase last year, notably São José and Palhoça on the mainland, where prices have been depressed for some time,” says Diego Simon, commercial director at VivaReal, an online property portal.

Although not in line to benefit directly from the World Cup in June (the nearest host city, Curitiba, is a four-hour drive away), Florianópolis will invariably feel the Fifa effect as more tourists land on Brazilian soil. Improvements are being made to prepare for visitors: a second airport to the south of the island and new cycle paths in the city centre.

Tough environmental legislation has been criticised for bringing bottlenecks to sanitation and electricity projects that are high on the agenda as the island grows. But both the residents and the municipality are conservationists at heart, protective of the vida boa, the good life that is the envy of Brazil.

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Buying guide

● Brazil has a low two per cent transfer tax on the declared property value; most foreigners buy properties with a publicly registered title

● Mild subtropical climate, snow-capped hills in the interior of Santa Catarina during the South American winter (June-August) and an average temperature of 26C in summer (December-February)

● Santa Catarina’s rate of life-threatening crime is 11.5 per 100,000, compared with a national average of 30, according to Brazil’s justice ministry

● Entrepreneurs can obtain residency, and eventual citizenship, by investing about $80,000 in a Brazilian start-up

What you can buy for . . .

$500,000 A four-bedroom apartment with sea views in the city of Florianópolis

$1m A five-bedroom home with a pool on the east coast of the island

$5m A waterfront mansion in Jurerê, with a private beach

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