Clipping of news on Brazilian Culture, Law and Citizenship
01.27.2016
This article was translated by an automatic translation system, and was therefore not reviewed by people.
transparent image
One of those responsible for this setback was a net outflow in 2015 of 50 billion reais from savings accounts
REUTERS
São Paulo - The volume of real estate loans in Brazil with savings deposits fell 33 percent in 2015 and should fall back in 2016, as well as become more expensive, predicted on Tuesday the Brazilian Association of Credit Entities Savings and ( Abecip), reflecting the recession in the country and lack of cheap resources, which are weighing on builders and potential borrowers.
UP CASE REAL ESTATE LOAN INTEREST
It said the volume financed by the sector last year totaled 75.6 billion reais, up from 112.9 billion reais in 2013. In December, 4.8 billion reais were released, 55.2 percent less than a year earlier. For 2016, industry funding should fall another 20.6 percent to 60 billion reais, predicted the president of Abecip, Gilberto Duarte de Abreu Filho, noting that the economic environment has imposed a sharp correction in the sector, after several years of accelerated expansion supported by low interest rates and government incentives.
According to the executive, the fall of 8.4 percent of GDP construction in 2015 until September, more than double the decline of the Brazilian GDP in the period, reflecting the greater weight of the adverse economic climate on the confidence of consumers and entrepreneurs in sector, given the long-term profile. With the expectation of rising unemployment, high interest rates and lower volume of resources of the Brazilian System of Savings and Loans (SBPE), and the greater prudence of banks in granting funds, the real estate market all must gradually adjust to lower levels, said he.
"We were in the same US production rate in its best years," said Abreu Filho. "The market will continue undergone adjustments in the coming years." After growing by nearly 800 percent in nine years until 2014, when the number of properties financed by SBPE reached 538,000 units last year this number fell to 342,000, punctuated movement by lower sales and launches.
One of those responsible for this setback was a net outflow in 2015 of 50 billion reais from savings accounts, largest source of mortgage financing in the country. As a result, the stock of loans, which had been climbing steadily since 2002, had last year down 2.5 percent to 509 billion reais.
The savings assets will happen parallel to the cycle of rising interest rates in the country, today at 14.25 percent. The savings yields 6 percent annually, plus TR. In this scenario, banks will follow selective in lending in 2016, and requiring greater input the borrower, said Abreu Filho.
Not to rely solely on the savings banks must seek funds in the market through instruments such as Real Estate Credit Bills (LCI). "Either the market will be subject to the saving of resources or will have to merge the source of funding with market resources," said the president of Abecip. "In this case, the result must be the credit enhancement for the borrower."
Another offshoot of this framework should be rising unemployment in the sector. The Abecip says that residential buildings have an average of three years to complete. "The industry fell by more than 30 percent in the volume of construction in 2015. If this level is maintained, the trend is that the workforce reduction is equivalent" he said. According to the Ministry of Employment and Unemployment (Caged) released last week, the construction sector had net loss of 416,959 jobs in 2015.
NEW CONTENTS
One of the outcomes of this process should be pressure on property prices, especially those used, for which funding modality had sharper decline in 2015, 50 percent. To monitor price developments in the sector, Abecip will launch in 2016 a new index, which will consider the value of real estate sales. There are currently several public bookmarks that are based on the offered price.
Source: The Day
Our news are taken in full of our partner sites. For this reason, we can not change their content even in cases of typographical errors.
transparent image
This article was translated by an automatic translation system, and was therefore not reviewed by people.