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Fabio Nogueira, president of Quartzo – one of Brazil’s growing residential real estate construction companies (based in Minas Gerais) – stated in an interview with the Pini Web Construction magazine that he expects that competition between the larger and the small to medium players will intensify as the sector continues to grow in the next few years.

Nogueira stated that: ‘today, the coexistence between large and small companies is perfectly possible, but I have trouble seeing this in the future.  If the small real estate developer wants to operate in line with the larger company, it will cost more.’

He also expects that lower savings levels will affect those companies who are not well capitalized to ensure the successful progress of their projects: ‘today the Housing Finance System (Sistema Financeiro da Habitação, SFH) allows for the smaller real estate development company to access funding.  They are used to investing less than 10 percent of the gross value of sales to get things going.  But the SFH finance system uses resources from the national savings which one day will arrive at a point where availability will be critically limited.’

Whilst demand levels are expected to remain high, Nogueira believes that the sector as a whole needs to brace itself for higher finance costs and lower loan to value levels’, however: ‘the bigger companies have the economic power and will arrive at a point where they have the competitive advantage over their smaller counterparts.

Advising the smaller real estate companies, Nogueira commented: ‘start from now to do your homework; look for construction projects with feasible delivery and focus on quality not quantity – because that is how credibility will be gained.’

The full interview with Fabio Nogueira of Quartzo can be seen here (in Portuguese).