By Lisa Flueckiger, Contributing Reporter RIO DE JANEIRO, BRAZIL – Infrastructure investments for the Olympic Games and vast, underdeveloped swathes of land have led Rio de Janeiro’s lesser-known Zona Oeste (West Zone) into a construction boom in recent years. Barra da Tijuca may have been on the radar for some time, but other neighborhoods in the area are now catching up. The baixada of Jacarepaguá, photo by Alexandre Macieira/Riotur. The Zona Oeste of Rio de Janeiro consists of more than just the beach neighborhoods of Barra da Tijuca and Recreio, stretching on until Guaratiba further up the coast and Jacarepaguá, Realengo, Bangu and Campo Grande further inland. The area has received massive infrastructure investments in recent years, the undeveloped space feeding the city’s need for more residential and commercial buildings as more and more people flock to Rio and the city’s sought-after South Zone becomes saturated. Together with the developments for the 2016 Olympic Games, 51 percent of which will take place in the ‘Barra’ Zone, Rio’s real estate focus is gradually shifting west. In 2012, Freguesia and Recreio dos Bandeirantes topped the list of new real estate projects getting the green light. “If you count a single building as a project, we for sure have several hundreds in construction in Zona Oeste. Major constructing sites that span over dozens of condos [are], I would guess, in the fifties,” Agente Imóvel founder Johan Jonsson estimated the current status of development. The focus of residential, as well as commercial buildings is centered around the future Olympic Games sites, which is also the site of huge investments in transportation infrastructure with the Transoeste, Transcarioca and Transolimpica Bus Rapid Transit (BRT) gradually coming online. “Now, when the huge developments in Peninsula are about to reach the finish line, most of the action takes place in the Autódromo area [next to the future Olympic park], where we can see kinds of mini cities with shopping malls and so on being built,” Jonsson continued. The City is an entire business district modeled after the city of London, photo courtesy of The City Business District. Avenida Abelardo Bueno, the main street north of the lake, is seen as the new commercial axis in Rio de Janeiro’s future. Today, already 20,000 people live there in 9,000 houses but numbers which are set to double by 2023 according to Secovi Rio’s latest predictions. The avenue is also home to “the City”, an entire new business district that is being built modeled after London with three towers including 1,033 offices plus a new 5,000 square-meter shopping mall. Construction projects in the area tend to be large in scale, with much of the residential development consisting of super-condominiums with several apartment towers and amenities such as gyms, swimming pools and playgrounds. In Freguesia, the number of individual houses has fallen by three percent in the last ten years, while the number of apartments has grown by 47 percent. “I’ve lived here since I was born and I think it’s a very calm neighborhood to live in. There is no noise and where I live it’s mainly a residential area,” Bruna Mazzoni, who lives in Anil, next to Freguesia, told The Rio Times. “A couple of years ago, construction increased a lot. The area is no longer as calm as it used to be and traffic increased a lot as well.” The boom in the Zona Oeste has also had an effect on prices. The area is still far from the sums charged in Ipanems and Leblon, but the real estate appreciation has, according to Secovi, been “substantial”. Campo Grande saw prices rise 15.3 percent in the first semester of 2013, more than any other neighborhood. With prices in Campo Grande currently at R$3,400 per square meter and R$5,549 in Jacarepaguá, Rio’s Zona Oeste offers a great alternative for those looking for a modern home without the price tag of the Zona Sul, and with considerably more space to show for it. 6 Responses to "Real Estate Boom in Rio’s Zona Oeste" Rob Montague November 6, 2013 at 4:00 PM It was inevitable that the Zona Oeste would start to boom now that Barra and Recreio are becoming fully-developed and very high priced. Rio doesn’t have much space for growth left except inland and westwards in the Zona Oeste. The main drawbacks to some of the neighborhoods mentioned in this article are their distance from downtown, the Zona Sul, and even from Barra and Recreio, with their offices and shopping centers. Some of the planned infrastructure developments will ease the problem, providing quicker routes via car and bus. A few areas in the Zona Oeste, like Campo Grande and Santa Cruz, on the western fringe of the municipality, are very distant from the center. These two areas have really been small towns or cities of their own, separated from the rest of Rio by open land and even mountain ranges (depending on the direction in which one is headed). Currently, bus or train service can take an hour or more to reach the center, even when there are no traffic problems or train breakdowns. Novice real estate investors should be sure they know the area well before buying in the Zona Oeste, because some of the more distant areas aren’t as likely to boom as those closer in. Jacarepaguá and Freguesia will probably be the fastest growing areas because they have good access to the center and to the shopping/commercial districts in Barra. They both also have good-sized middle class populations already, and the planned infrastructure improvements will benefit these neighborhoods directly. It’s most likely that more distant areas like Campo Grande and Santa Cruz will experience growth and price appreciation, too, but at a slower pace than the neighborhoods closer in. However, they’re only likely to boom when those closer-in neighborhoods also become saturated, like Barra and Recreio now. Buyers in the closer-in areas should still be cautious, because real estate prices throughout the city have been affected by the speculative bubble that is at its worst in Ipanema and Leblon. Most people believe the bubble will burst after the Olympic Games in 2016, leading to a major crash in the real estate market and perhaps in the Brazilian economy overall. The effects of the bubble bursting will probably not be as severe in the more outlying and less overpriced districts of the Zona Oeste and Zona Norte, but it’s still likely that prices there will fall, in some cases to less than what buyers paid for the property, and it will take considerable time for prices to recover. For long-term investors (like those buying a property they actually intend to live in) this may be OK. But short term investors who are just buying properties in the hope of rapid appreciation should be very cautious, because prices may already be near their peak and will have nowhere to go but down. Even though opportunities exist in the Zona Oeste, it’s most likely that they aren’t for anyone thinking they can get rich quickly by buying and flipping property there. If someone really hopes to profit from Rio’s growth, they’d better plan to be in it for the long haul. LatAm Investor November 8, 2013 at 1:26 PM Many consider the quality of life in Zona Oeste to be superior to zona sul particularly for families. It is also very common to also work in Barra as the office infrastructure is top notch and much cheaper compared to ZS. The beaches are much cleaner (think the ubiquitous sewage drainage in to zona sul’s beaches), there is beautiful nature, many parks, less crowding, few favelas, low incidence of petty crimes, good schools, excellent restaurants, etc. Rio’s real estate market is certainly helped immensely by the upcoming sporting events but major property investors and developers are looking well beyond. The Rio economy is benefiting substantially from the oil industry (OGX’s demise notwithstanding), the growth of the middle class and other businesses (Microsoft, Cisco Systems, etc) establishing presence in the city, improvements in infrastructure and certainly because it is a highly desirable alternative to SP. I would view Rio as a long term bet but I agree that investors in some areas are unlikely to achieve blockbuster returns like the ones generated in the past 5-10 years. We must also put the price appreciation of the last 10 years in perspective: the real estate prices basically were stagnant for 2 decades in the Rio market and hence the rapid appreciation commenced after economic and political stability really improved in the early 2000s. The opportunity to generate very strong real estate investment returns still exists in Brasil but it is more likely to be achieved in smaller, secondary cities for example in the north and northeast. Sydney Business address November 11, 2013 at 3:46 AM Everywhere real estate sector booms and provide good property investment options as in Brazil also Pingback: Rio's Booming R$2 Billion Beach Economy | The Rio Times | Brazil News Pingback: The West Zone’s Real Estate Boom Reaches Recreio | The Rio Times | Brazil News Pingback: Rio’s Booming R$2 Billion Beach Economy | COPACABANA COWBOY Leave a Reply Cancel Reply Your email address will not be published.