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The debate over whether the ongoing acceleration of the Brazilian real estate sector is leading to a bubble has seen little sign of abating with a wide range of both bullish and bearish commentary appearing over 2011 (much of which I have attempted to show on this blog). One Brazilian economist who has developed a strong following this year is Ricardo Torres via his Trading Café blog which explores a wide range of issues related to a country undergoing rapid evolution. This blog post has two recent subtitled videos with his takes on the current Brazilian housing market:

With rising pressures in dealing with Brazil’s massive affordable housing deficit as a result of the impending 2012 municipality elections, the government has affirmed its commitment to continue with the R$ 22.9 billion Minha Casa, Minha Vida (My House, My House) programme after the slow pace of its development in 2011.

Due to being the location of the headquarters of the Brazil Real Estate & Land Investment Guide as well as our associated projects via the Fez Tá Pronto Construction System, we have translated an article which recently appeared in the Brazil’s Exame magazine using research by consultancy Deloitte – indicating the North Fluminense and South Capixaba of Rio de Janeiro state as the most dynamic and important growth regions of the country.

Prominent Brazilian research organisation the Getúlio Vargas Foundation (FGV) recently published an annual property construction industry confidence report which concluded that their associated measurements had fallen by an average of 10.2 percent between September and November 2011, compared to the same period of 2010.

December 2011 statistics and graphs (released mid-month) with information related to Brazil’s real estate and land industry by clicking on the link above – including the property price variation index, OECD composite leading indicators, inflation statistics, the SELIC interest rate, housing / private / commercial sector lending, percentage changes in construction costs, consumer spending levels, consumer / industrial / business confidence, real earnings and unemployment.

Speaking with the Estadão newspaper, Marcelo Ribeiro of the Living Housing Group (part of the Cyrela Brazil Realty development company) expressed his concerns related to the rising costs of labor in Brazil, commenting that the input is “the principle variable in our activity.”

A video extracted from a November 2011 Jornal da Gazeta news programme on problems faced by São Paulo apartment buyers as a result of being falsely led to believe they would have access to financing via the Caixa Econômica Federal as part of the Minha Casa, Minha Vida (“My House, My Life”) housing programme.

Continuing on the current theme of 2012 Brazil property market behaviour, Paulo Sady Simão of the Brazilian Construction Industry Chamber of Commerce (CBIC) recently commented to national press: “we saw a significant increases and excesses in the recent past which are already seeing signs of settling – but I do not see motives for prices to rise neither fall.”

Brazil’s government administered construction cost index (Índice Nacional da Construção Civil, SINAPI) has seen a 0.37 percent average rise in the month leading up to November 2011 – representing a 5.52 increase over the 12 previous months.

As is usual towards the end of the year, Brazil real estate and land specialists have been presenting their thoughts related to the imminent future of the sector, such as via a recent Construction Industry Syndicate (SindusCon) presentation event in São Paulo. Economist from the Getúlio Vargas Foundation (FGV) Ana Maria Castelo stated that construction sector growth had slowed from what was a widely perceived excess of 15.2 percent in 2010 to 4.8 percent in 2011. For 2012, the growth rate is expected to remain broadly constant at 5.2 percent.

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Ruban Selvanayagam