- posted 12 years ago
From: " email@example.com"
Subject: GOOD NEWS - More real estate financing, sales and flexibility
- Stable Economy Factors Year's End 2007
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Excerpt from the "Opovo" Newspaper Dec.2nd 2007
2008 is the year to purchase your property in Brazil.
The changes in financing for residential real estate should make 2008
the year to buy.
The country is currently having its' greatest moments in civil
construction with more credit available, lower interest rates and
In 2007 there were 180,000 property closing because of financing.
"Poupança", largest creditor for residential properties will provide
approximately R$22 Billion next year according to the ABECIP. This
sector of the market should continue the good year of 2007 when there
has been an increase of 93% in capital resources well into the end of
the decade. For the first time in 20 years Brazil has accomplished
such a monumental feat.
The dream of owning their home will be much closer to realty for the
average working Brazilian in 2008.
We are awaiting the largest volume of loans: R$28,5 Billion (approx.
Besides this, the banks have promised less bureaucracy and speed up
The numbers were supplied by the Brazilian Association of Real Estate
Credit Institutions and Savings. R$ 22 Billion (approx. U$D 13
Billion) came from savings operated by 22 institutions.
The other R$ 6,5 Billion or U$D 5 Billion are, according to ABECIP,
from " Fundo de Garantia por Tempo de Serviço" or "FGTS" or
Guaranteed Funds for Time of Performance of Services. This is
automatically paid in by all persons who work in a legitimate manner
like USA Social Security benefits and is about the only real benefit
to workers in Brazil.
In this case, there is no definition for the year of 2008 as of yet
and the Associations is working on a rather moderated estimation
according to José Pereira Gonçalves, the Technical Superintendent of
ABECIP. However, the projections are to meet at least the same
this year if not higher.
One of the greater reason for this being are the immense amounts of
money circulating on the market with many private banks entering the
Another reason is that many construction companies opened up capital
for the market expansion which is definitely the case in the State of
Gonçalves also stated that this favorable movement in civil
construction is due to the stable economic factors and therefore we
can observe more adequate regulations for these purposes.
Thus, such are giving more security to the borrowing agents and
incentives to make funds more readily available.
This scenario caused the banks to become more flexible, the credit
limits were raised, longer financing terms were placed and decrease
interest rates was applied.
In 2002 the per annum rates were on average 12% with maximum 10 year
term. Today that number dropped to 9% and the terms increased to 25
Also, we can observe the spike in numbers of persons to whom the
monthly payments now are affordable and furthermore increasing the
sales of real estate units.
The Brazilians have more buying power today than in the past 20
Many institutions are considering raising the terms once more to a
round 30 year package but the practice of the Brazilian customer is
pay off the debt before the terms are up and economize in the process
of renegotiating the debt like a thing that we know as the
for lower interest rates whenever possible.
For the director of Porto Freire Engineering, Rodrigo, the rates
be even lower than these but already increased the volume of sales by
15% for the Cearense Company.
According to the President of the Association of Construction
Companies Mexico builds an estimated 1 Million of units per year as
whereas Brazil only builds 250,000.
This creates a residential construction deficit and the people in
Ceara are not so accustomed to going to a bank for financing like in
Sao Paulo for example. They prefer to obtain it directly through the
building company which in turn ties up the "cash" resources which are
so obviously necessary for further expansion and building of more
Martin Gajewski Jr.
Author of the Official Invest in
Brazil Google Group
Some very interesting articles on investing in Brazil:
Daily Telegraph - Brazil takes on the world
Latin Business Chronicle - Brazil's Outlook for 2007
Brazilian Chamber of Commerce (NEW!) Brazil is the Fifth Most
Attractive Country for Investment ////Real Estate Investment in NE