Some 12 miles north of here, in the year 1500, Pedro Alvares Cabral became the first European to set foot in what would become the largest country of South America, and claimed it for the Portuguese crown. For the best part of a century there­after, nothing much happened. Then, in 1586, the Jesuits arrived with missionary zeal, to create, unwittingly, what has since been dubbed the chicest place you have never heard of; haunt of European nobility, Hollywood aristocracy, and fashion royalty, nestling in the middle of nowhere.

 

The place is Trancoso, in the Brazilian state of Bahia. Sitting on an idyllic stretch of the Costa del Descubrimiento, it presented a challenge to the Jesuits, who found only mangroves and thick littoral forest inhabited by indigenous tribes. Intent on saving souls, they hacked their way through the jungle to create a five-acre, 300-metre-long rectangular green above a cliff face, known as the Quadrado. On each of the long sides of the rectangle, they built little houses of adobe-like pau-a-pique with wood shingle roofs. At the far end of the Quadrado, perched above the cliff and silhouetted against an azure ocean, they erected the little whitewashed church of São João Batista, one of the oldest churches in Brazil. Sunday services are still held here – the focal point and heart of the historic town.

 

By the time hippies in search of an alternative lifestyle discovered Trancoso in the early 1970s, only some 300 nativos – mainly fishermen – lived in the village. There was no electricity (until 1982) or roads (until 2002) – just the kind of idyll the newcomers were looking for. The biribandos, as the hippies were known, interacted with the locals and began to purchase land. 

 

Ricardo Salem, hippy-turned-architect who arrived in 1976, bought, he has been quoted as saying, “2km of beach, about 300m deep, for the price of a Volkswagen Beetle”. He has since designed scores of elegant, low-rise villas – one of them, a three-bedroom, ocean-view property on Rio da Barra beach, is on the market for $1.554m through Karigan Residential Group.

 

The shift in Trancoso’s fortunes began 10 years ago, when the sleepy coastal village was discovered by a new wave of wealthy weekenders from São Paulo, soon followed by Europeans.

 

According to Edmond van Wijngaarden of Exclusive Realty Brasil – who has lived in Trancoso for four years and has specialised, since 2005, in helping foreigners buy high-value properties – house prices have increased fivefold over the past decade, and show no signs of slowing. “The current investment climate that Brazil offers, with decreasing interest rates, growing foreign investments, and a stable government are all contributing factors,” he says.

 

Surprisingly, however, little has changed in the laid-back way of life. Those foreigners who have built or purchased houses over the past 10 years are anxious to protect the low-key charm of Trancoso. “The balance between foreigners and locals is a very delicate one,” says Wilbert Das, designer and former creative director of the fashion label Diesel, who first visited the village in 2004, and five years later opened the Uxua hotel, comprising several old casas on the Quadrado, which Das restored. “We strongly believe it’s best for Trancoso to contain its ‘footprint’ to the original centre of town, and encourage historical restorations of property – though we would never buy homes which natives live in, or displace a native person.”

 

When one of the 50-odd properties on the Quadrado becomes available, it tends to be communicated by word of mouth – and, it seems, Das is the first to know. “A number of our guests at Uxua fell in love with the place and asked me to find and design homes for them here,” he says. But whereas, well into the 1980s, one of the original Jesuit houses on the Quadrado could be bartered for a horse, they are now rarely available and predictably expensive.

 

One of the houses that Das transformed for a former Uxua guest lies just off the Quadrado on Rua do Bosque. A restoration of an old atelier of a famed ceramic artist who moved to Trancoso in the 1970s, the four-bedroom house with pool is now on the market for R$2.5m ($1.27m). A four-suite compound, housed in three buildings off the Quadrado and fully furnished, is also currently for sale at R$2.2m ($1.116m). Both properties are available through Casa Quadrado, a subsidiary of Uxua.

 

A 10-minute stroll from the Quadrado leads to the golden beach of Nativos. Trancoso’s beachfront villas offer a very different kind of living, less integrated with the local community and with multimillion dollar properties nestling discreetly among the coastal vegetation. The most famous of these villas are to be found on the beach of Itapororoca, to the south, where a seven-bedroom villa with infinity pool is available for around R$5m ($2.54m), through Exclusive Realty Brasil. With the same agent, 1,200 sq metre homes at Itapororoca, still on the drawing board, are already selling off-plan for R$25m ($12.681m). Nearby Terravista – considered Latin America’s most exclusive golf resort – has an irresistible allure.

 

A common trait of Trancoso’s wealthy newcomers is the sense of social responsibility towards the local people. “Each person who invests in Trancoso should actively contribute to its future in some way,” says Das, citing as an example the privately-funded ISHC School, his own support of numerous local projects, and the plans of Reinold Geiger (chief executive of L’Occitane) to build a hilltop amphitheatre for an annual classical music programme. João Roberto Marinho, one of the wealthiest individuals in Latin America and another resident, is also on the board for Geiger’s programme.

 

Meantime, back on the Quadrado, as dusk falls, lanterns hanging from tamarind, cashew and mango trees illuminate the square. Horses graze peacefully, corrupião and xexéu birds trill their last, shops have finally opened, and restaurants come to life behind the brightly-painted facades of the houses the Jesuits built more than 400 years ago. There is no electricity in the street, no motorised traffic around the square – not even house numbers, the homes being known by their colour. This is no place for a person in a hurry. “The famous joke around here,” says van Wijngaarden, “is that the only thing to move fast in Trancoso, is the price of property!”