“Minha Casa, Minha Vida” Fuelling Brazilian Property Bubble
A quote recently made by Fábio Portela via his Pequeno Investidor (“Small Investor”) website on the impact that Brazil´s housing programme is having on the overall market:
“Readers of this blog will know that the Minha Casa, Minha Vida (“My House, My Life”) programme is already experiencing a number of problems. One example has been a large amount of fraudulent activity under the initiative, particularly with unscrupulous construction companies marketing that their units can be incorporated when, in fact, the criteria of the Caixa Econômica Federal is not being satisfied. But the main problem is that the programme has generated a property bubble in the low cost housing sector bringing issues related to viability. The companies involved in the sector now want the government to further increase price limits – yet clearly, if this happens, the values of these properties will be pushed higher which will not work out well.”
Please also see a recent post I wrote for the Next Billion enterprise development site – “Facing the Challenges of Base of the Pyramid Housing in Brazil” – which covers the issues mentioned by Fábio Portela above in more depth as well as the recently updated Fez Tá Pronto Construction System Report (2012), which from pages 19 to 31 explores Brazil´s favelas and the housing deficit; the inefficiencies of Minha Casa, Minha Vida programme; Brazilian low income housing affordability and how Fez Tá Pronto is the only solution to the Brazilian affordable real estate crisis.
