• Thu. Feb 22nd, 2024

    Abecip Forecasts Record High Credit Volume for Brazil’s Real Estate Industry

    Abecip, the association of Brazilian real estate credit companies, predicts that the volume of credit for real estate purchases in 2024 will reach an all-time high of BRL 259 billion (USD 52.6 billion). This projection indicates a 3 percent increase compared to last year, despite the country’s high debt levels and borrowing costs.

    The surge in real estate loans can be attributed to the use of funds from the FGTS mandatory severance fund, which allows workers to withdraw money for specific purposes such as property purchases. In contrast, operations utilizing savings have declined in recent years as Brazilians dip into their savings to cover daily expenses in the wake of the pandemic-induced recession and the inflationary crisis of 2021-2022.

    While these factors have put pressure on personal finances, the real estate industry remains bullish for 2024. São Paulo municipal lawmakers have recently approved zoning rules that favor the construction of large residential buildings in low-density areas. This move aims to address the increasing demand for housing in the city.

    Investors and developers are optimistic about the potential growth in the real estate market, driven by urbanization, population growth, and low interest rates. The recent legislative support for construction projects further fuels this sentiment.

    However, challenges lie ahead. Rising inflation and uncertainties in the global economy could potentially impact Brazil’s real estate industry. Developers and investors need to carefully navigate these conditions to ensure sustainable growth.

    In summary, Abecip’s forecast for record-high credit volume in Brazil’s real estate industry highlights the resilience and potential of the market. While the use of savings has declined, the utilization of funds from the FGTS severance fund has propelled real estate lending. The approval of zoning rules for large residential buildings further indicates positive market sentiment. As the industry moves forward, it must remain attentive to external factors that could affect its growth trajectory.

    FAQ:

    1. What is Abecip?
    Abecip is the association of Brazilian real estate credit companies.

    2. What is the projected volume of credit for real estate purchases in 2024?
    The projected volume of credit for real estate purchases in 2024 is BRL 259 billion (USD 52.6 billion).

    3. How does this projection compare to last year?
    The projection indicates a 3 percent increase compared to last year.

    4. What is contributing to the surge in real estate loans?
    The use of funds from the FGTS mandatory severance fund is contributing to the surge in real estate loans.

    5. Why have operations utilizing savings declined in recent years?
    Operations utilizing savings have declined as Brazilians dip into their savings to cover daily expenses due to the pandemic-induced recession and the inflationary crisis.

    6. What recent zoning rules have been approved in São Paulo?
    São Paulo municipal lawmakers have recently approved zoning rules that favor the construction of large residential buildings in low-density areas.

    7. What factors are driving potential growth in the real estate market?
    Urbanization, population growth, and low interest rates are driving potential growth in the real estate market.

    8. What challenges does Brazil’s real estate industry face?
    Rising inflation and uncertainties in the global economy could potentially impact Brazil’s real estate industry.

    Definitions:

    – FGTS: The FGTS (Fundo de Garantia do Tempo de Serviço) is a mandatory severance fund in Brazil, where workers can withdraw money for specific purposes such as property purchases.

    Related Links:
    Abecip
    Central Bank of Brazil