Brazil in Numbers
With the merger between Bovespa Holding and BM&F (Bolsa de Mercadorias & Futuros), Brazil will have the second largest Stock Exchange in the American continent, with the market value of US$ 18 billion, only overcome by Chicago Mercantile, in the United States, with market value of US$ 27,68 billion.
The inflation was controlled. In 1995, it was 22% per year and in 2007, 4.5%.
One of the pillars that support the entrepreneurial optimism is the credit increase. In 2002, the credit represented 22% of the GNP, while in 2007 it moved to 35%, with estimated amount of US$ 581.2 billion.
The Power of the Brazilian Economy
- The largest exporter of bovine and poultry meat in the world.
- The largest Latin American airplane exporter.
- The 4th largest exporter of swine meat in the world
- The 2nd largest market of flooring and tiles in the world
- The 3rd largest market of cosmetics, cell phones and soft drinks in the world
- The 4th largest chocolate market
- The 5th largest market of computers and alcoholic drinks in the world
- The 8th largest automotive market in the world
- The 10th largest medicine market in the world
Source: Ubrafe
Property Market in 2009
In 2009, the property market will continue growing, albeit at a slower pace; it will keep on readjusting its targets, at least during the first semester; and it will work in a selective manner, with projects that are suitable for the demand that exists.
As for the resources needed to fuel the sector, the government gave it its vote of confidence late in 2008.
Resolution 3629 from the Central Bank, in channelling resources from savings (at a regulated interest rate), included a mechanism for fuelling the market, giving it greater liquidity. As a result, volumes could reach R$ 10 billion by March 31, 2009, including both Caixa and private bank lending. Caixa alone will operate with R $ 3 billion.
We believe that the SFH (Housing Finance System) will strengthen, with government incentives, such as the SFI (Property Financing System). An example of this is the possibility that as from January, Caixa will start buying CRIs (Property Receivables Certificates) FIDCs (Credit Rights’ Investment Funds), FII (Property Investment Funds) and the debentures of companies that will use these funds for launching new developments.
Interest rates for these operations will be 7% a year + TR [reference rate] for developments that have popular housing unit values - such as properties up to R$ 130,000 in the metropolitan regions of Sao Paulo, Rio de Janeiro and the Federal District -, and 9% a year + TR for properties over R$ 130,000, but that conform to Housing Finance System (SFH) regulations.
This movement will allow companies to maintain their focus on meetings the needs of economic class C and lower income groups, by developing cheaper properties, a segment that is most in need of funding.
With regard to FGTS funds, the budget approved on October 30, 2008 by the FGTS Board of Trustees, envisages freeing up nearly R$12 billion for popular housing. This makes us believe that there will be no lack of funding for end consumers, at interest rates that vary from 4.5% per annum for Fund quota-holders to 8.6% per annum for the Pro-Quota-holder Program, which allows for financing of properties for first-time buyers without them being tied to a maximum property value or gross family income rules.
Secovi-SP will keep working so that there is sufficient credit available for building and buying property and it will always defend greater investment from private banks. With more funds and booming demand, under no circumstances can there be a lack of property building in the market.
Admittedly, there is a concern about a possible slowdown in the economy and employment generation, mainly for lower income families, but the industry’s realistic optimism will prevail, which is that after twenty years it has come out of stagnation and gone back to operating on a solid foundation. Despite occasional slow-downs in growth, the housing market will continue to grow.
Source: Secovi SP
Secovi-SP discloses quarterly data of the 2009 property market
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In March, 2162 new properties were sold in São Paulo, compared with 1556 in February and 1113 in January, indicates survey from Secovi-SP |
Du Plessis, Petrucci and Bernardes present the quarter’s numbers
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The effects of the international financial crisis on the property sector are growing increasingly weaker, according to the Quarterly Review of the Property Market in São Paulo, released by Secovi-SP to the press on 20 / 5.
The indicators show that there was an obvious recovery in the number of housing units launched and sold in the city of Sao Paulo, after the strong impact caused by the global turbulence. From February to March, according to data from Embraesp (Brazilian Wealth Studies Company), there was an increase in the volume of property launches from 1200 to 1600 units. The total launched in the first three months of the year reached 3200 dwellings, compared with 7000 for the January to March 2008 period.
"It is important to point out, however, that 2007 and 2008 were atypical years, which recorded exceptional numbers that were far higher than the historical averages, which led Secovi-SP to use 2006 as the basis for comparison purposes. In the first quarter of that year, the volume of residential units launched was 2700, 13% below the result of the first three months of 2009", emphasizes Celso Petrucci, chief economist Secovi-SP.
Quarter - In the first quarter the sales volume (4831 dwellings) was higher than the number of launches (3154), which is reflected in the balance of available properties. "We had already been observing this trend since February and this increases the perception that the growth in stock, registered in the last few months of 2008, is beginning to be offset by sales this year," comments Albert Du Plessis Filho, Vice President of Technology and Market Relations for Secovi-SP.
The organization's president in office, Claudio Bernardes, also argued that "demand growth is closely tied to the urban occupancy model", highlighting the importance in making available areas for city occupancy and housing supply processes.
See below the whole of the studies from Secovi-SP.
Quarterly Review
Secovi Survey, March/2009
Source: Secovi
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