REAL ESTATE MARKET IN BRAZIL

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REAL ESTATE MARKET IN BRAZIL
JOÃO CRESTANA
President of Secovi‐SP and CBIC National Commission of Construction Industry HÁ LIMITES PARA O CRESCIMENTO
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SIZE OF BRAZIL
Population distribution by gender, according to age group – BRAZIL 2010
Source: IBGE – 2010 Census
Men
Women
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SIZE OF BRAZIL
POPULATION – BRAZIL
Rural x Urban Source: IBGE – 2010 Census
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SOCIAL MOBILITY
AND
NEW MIDDLE CLASS
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CHANGE OF PYRAMID POPULACIONAL
BRAZILIANS OF D AND E CLASSES TEND TO MIGRATE TO C CLASS, WHICH WILL BE PREDOMINANT IN 2014 ( millions of people)
6
8,1
5,7
9,8
6
11,6
Classe A
Classe B
37
Classe C
49,7
58,4
Classe D
Classe E
38,2
28
20,3
Source: DataPopular Institute
10,7
6,8
3,7
2002
2009
2014
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THE NEW C CLASS: WHO ARE THEY?
Moves R$ 881 billion per year
50% of the population
46% of consumption
59% of credit cards
61% of internet users Millions of brazilians have made their dreams into life projects
Source: Instituto DataPopular
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THE NEW C CLASS: WHO ARE THEY?
68% OF THE C CLASS YOUNGSTERS HAVE STUDIED MORE THAN THEIR PARENTS
Source: DataPopular Institute
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C CLASS AND THE HOUSING RATIO
2011 1st TRIMESTER
High Income
Low Income
Total of people who showed interest in purchasing a property or land in 12 months: 9,9 million
New Middle Class
Fonte: Instituto DataPopular
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POTENCIAL MARKET FOR HABITATION
THE POTENCIAL MARKET FOR HABITATION IS SHAPED BY THREE SECTORS
1
Social Housing Deficit
2
3
Future households
Given and rented habitations
Source: DataPopular Institute
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REAL ESTATE MARKET IN SÃO PAULO CITY
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LAUNCHING OF RESIDENTIAL PROPERTIES
São Paulo City
In thousand units
39
38
34
32
26
2006 to 2010
2Sem
Average = 64%
1Sem
Average = 36%
Source: Embraesp
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PRICING STUDY NEW RESIDENTIAL PROPERTIES
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PRICE X INFLATION CUMULATIVE CHANGE
Var% Accumulated Price* m² of Floor Area of New Properties in São Paulo City
8,6%
*Considered average price of properties launched in a period of 12 months
5,6%
3,9%
0,6%
jan/11
fev/11
mar/11
Preço m²
Source: Secovi‐SP
abr/11
INCC
IPCA
mai/11
TR
jun/11
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COMMERCIALIZATION
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COMMERCIALIZATION OF NEW PROPERTIES
Município de São Paulo
37
In thousand units
28
36
33
36
2006 to 2010
2Sem
Average = 54%
17
1Sem
Average = 46%
Source: Secovi‐SP
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PERIOD AVERAGE SALE OFFER
Average Sale Offer per year – in %
2006
Source: Secovi‐SP
2007
2008
2009
13,7
22,6
23,2
17,6
2006 to 2010
Average = 16,6%
13,8
16,2
12,1
São Paulo City
2010
Jan‐Jul 10 Jan‐Jul 11
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BUSINESS VENTURES
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LAUNCHING OF BUSINESS COMPLEXES
LANÇAMENTOS DE CONJUNTOS COMERCIAIS
São Paulo City
5,8
Thousand complexes
3,5
2,9
2,4
2,2
2,1
1,1
11%
94%
2006
Source: Embraesp
2007
43%
2008
68%
2009
37%
2010
Jan‐Jul 10 Jan‐Jul 11
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RESOURCES AND FINANCING
IN BRAZIL
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REAL ESTATE FINANCING
Financing – Savings Funding and Guarantee Fund for Lenght of Service
Amount (R$ Billion)
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REAL ESTATE FINANCING
LTV – Acquisition – Savings Funding
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OPPORTUNITIES
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FUTURE OF REAL ESTATE MARKET
Chalenge: Remuneration of Investor x Borrowing Cost
An alternative: Interests Reduction of Borrowing Cost from the Personal Income Tax
The interests will be reducted from the base of personal income tax calculus;
Temporary benefits;
System used in other countries;
It was in operation in Brazil (mid 70´s until 84).
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FUTURE BRAZIL
y Low income market will remain for the next 15 years
y Requests from people who live in precarious conditions: rent and new households
y Younger, more educated and better oriented consumer
y Purchase of a property: dreams and apprehension y Brand “connected to” this new consumer will gain strenght
y Sustainable and organized urban development
y Perennial Housing Policy from the State
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THANK YOU
João Crestana
[email protected]
(5511) 5591‐1306
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