São Paulo – Civil construction had net profit of 577 million Brazilian reals in the second quarter of 2009, 3% more than in the same period last year, according to figures disclosed by consultancy company Economática. Part of this result is due to sales boosted by the My House, My Life Program, promoted by the Federal Government of Brazil, according to the evaluation of sector representatives.
According to Sérgio Paulo dos Anjos, the commercial director at a construction company, after the release of the My House, My Life Program, the company doubled its sales. In the first quarter of 2009, the construction company sold 431 million reals (US$ 234 million) and, in the second quarter, this figure almost doubled, reaching 851 million reals (US$ 462 million). "This is a very strong result for the program. Our construction company was the one that had the best performance, as we were focussed on this low-income housing sector, ready for the market. Other construction companies are getting ready, buying land, developing projects."
Paulo pointed out that the My House, My Life program brought to the market a purchase option that clients had never been given. "Clients have up to 23,000 reals (US$ 12,500) in subsidies. That is, if the apartment is worth 100,000 reals, he will pay just 77,000 reals. This benefit with the Federal Savings Bank is real and he [the consumer] feels it in his pocket." The commercial director also pointed out the existence of the unemployment insurance, granting the buyer the right to be unemployed for three years without losing his home. "Three years is more than enough for you to find another job, settle down again and not miss payments for your house again."
Lower monthly fees due to lower interest rates stimulate the purchase of homes. "The client calculates it and discovers that what he is going to pay for the house purchase may, often, be lower than the rent he pays. The condition is very favourable." Paulo said that all these conditions, aligned to the demand in the country, are providing to the market a significant change.
According to the Savings Bank, since the release of the program, in late March, the bank has already received 1,312 proposals, corresponding to 255,000 houses. Of these, 494 have already had their analysis completed, which represents 90,000 homes. According to the bank, 204 enterprises have been developed, benefiting 32,207 families, for the value of 2.04 billion reals (US$ 1.1 billion).
The program’s target is to build 1 million homes, priced from 80,000 reals (US$ 43,000) to 130,000 reals (US$ 71,000). Approximately 400,000 units should be turned to people who earn from zero to three minimum wages, and 400,000 others should go to those earning from three to six minimum wages. Another 200,000 should go to those earning from six to ten minimum wages.
The regional housing manager at the Federal Savings Bank, Nédio Henrique Rosselli Filho, stated that the My House, My Life plan has boosted the market, although the project is still at its initial phase, in which construction companies are presenting projects for analysis and approval at the Federal Savings Bank. "The moment for selling to clients should still take six to eight months. We hope that these sales should expand starting in November."
According to Nédio Rosselli, companies that already have projects that may fit the profile of the program are in the lead with regard to these sales. This caused the bank to have a higher number of new projects up to the 12th of this month than in the whole of last year. "In 2008 we closed 23 billion reals (US$ 12.5 billion) in housing financing. From January to August this year, we reached 23.2 billion reals (US$ 12.6 billion). We have already financed 455,000 homes, not counting those in the program."
The average number of new contracts is 3,000, in all financing lines, said the regional housing manager at the bank. "The tendency is for the My House, My Life program to heat the sector up even further."
*Translated by Mark Ament
