| SAO PAULO
SAO PAULO Oct 5 Brazil's depressed homebuilding
market could see the start of an upswing next year as developers
regain confidence, Lucas Vargas, chief executive of online
classifieds VivaReal, told Reuters.
Brazil's worst recession in decades has led to record home
sales cancellations, a reduction in new developments and some
homebuilders filing for bankruptcy protection.
Even so, economists expect Latin America's largest economy
to emerge from recession in 2017 as inflation eases and the
central bank slashes interest rates.
In its monthly survey on the state of the retail market
released on Wednesday, VivaReal said that high borrowing costs
and unemployment were discouraging home buyers and making cheap
rents a more attractive option for many Brazilians.
Rents in Brazil are among the lowest in the world, averaging
6 percent of the value of a home compared with 7 or 8 percent in
the United States and Europe, Vargas said.
In the third quarter, rents dropped by 5.6 percent from a
year earlier, the lowest level since VivaReal started keeping
records in June 2013.
"We are seeing a return of homebuilder confidence but this
optimism is not necessarily shared by the consumers," Vargas
said. "We could be talking about the start of a new sales cycle
in a year."
Homebuilders such as Cyrela Brazil Realty SA said
in August that sales cancellations, at a historic high of 25
percent, should only drop in the medium term.
Mortgage loans totaled 3.8 billion reais ($1.2 billion) in
July, a 60 percent decline from April 2015, just before Brazil's
largest mortgage lender, Caixa Economica Federal, changed
lending rules, VivaReal said.
Demand for apartments between 50 and 100 square meters
remains higher than the available stock, a niche that
homebuilders could explore once interest rates come down,
according to the VivaReal survey, which analyses 5 million ads
on its platform in 30 cities.
In a positive sign for the housing market, the closely
watched Fipezap index showed the biggest monthly increase in
home prices in 14 months in September - though it noted prices
were still falling in several major cities.
Brazil's mortgage market represents a mere 9.6 percent of
gross domestic product, much less than levels in Britain and the
United States, according to Abecip, an association representing
real estate lenders.
($1 = 3.2198 reais)
(Reporting by Ana Mano; Editing by Leslie Adler)