SAO PAULO Feb 20 Brazil's housing starts fell
sharply in December following several months of improvement, an
industry group said on Monday, indicating a still fickle pickup
in real estate activity as the economy edges closer to a
The widely followed Abrainc-Fipe index showed a 21.5 percent
drop in housing starts in December from a year earlier, the
group known as Abrainc and research institute Fipe said in a
Still, it rose 9 percent in 2016, suggesting a potential
rebound as interest rates fall toward single digits, boosting
the outlook for home lending.
The so-called VSO indicator, which gauges sales as a share
of total units available for purchase, slipped 0.6 percentage
point to 7.6 percent, indicating available inventory would cover
13.2 months' worth of demand, according to the report.
Overall sales cancellations fell 14.3 percent to 3,080
contracts, the fourth straight month of declines.
That drop suggests homebuilders may be turning the page on
months of high cancellations that weighed on profits throughout
Seeking to ease that burden, the Brazilian government is
expected to propose an overhaul of the rules governing sales
cancellations, potentially imposing a fine on home buyers who
decide not to go ahead with purchases.
Currently, there are no Brazilian industry standards for how
much, if any, of a down payment should be returned to buyers,
and litigation has sometimes favored buyers over construction
Under one of the proposals under discussion, the fine could
be limited to 10 percent of the value of the house.
After meeting with construction industry representatives in
São Paulo, Brazilian Planning Minister Dyogo de Oliveira told
reporters there has been no decision yet on the matter. He
declined to say when the government would send the new
legislation to Congress.
The Abrainc-Fipe indicator, launched in August 2015, is the
first national index for the real estate sector, compiling data
provided by 20 of 34 Abrainc associate members operating in
(Reporting by Ana Mano; Editing by Meredith Mazzilli)