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Whilst government officials were keen to fanfare the progress of the Minha Casa, Minha Vida (”My House, My Life”) programme this week – representatives of Brazil´s real estate sector at a public-private gathering in São Paulo took the opportunity to speak out against the realities of the initiative, with calls for the authorities to raise the maximum price limit once again (a request that was subsequently declined by Inês Magalhães, secretary of Brazil´s housing ministry).

According to Eduardi Aroeira Almeida, partner at the Apex construction company, the inflated real estate market has made constructing under the programme more unviable than ever: “an apartment that I used to sell for R$ 90,000 has grown in value to R$ 170,000,” he stated.  It was widely commented that with the rapid rises in land valuations and difficulties in legalising plots under the programme, it has also become close impossible to construct for the 1-3 minimum salary groups (earning between R$ 622 and R$ 1,688).

The president of the Construction Industry Chamber of Commerc e (Câmara Brasileira da Indústria da Construção, CBIC) Paulo Safady Simão agreed with many of the comments made but argued that there are still some regions that are potentially workable.  He indicated that more involvement is required at both state and municipality levels – as with what has occurred in São Paulo where governor Geraldo Alckmin and Dilma Rousseff recently signed an agreement for a R$ 8 billion construction plan to build 97,000 housing units for those earning up to R$ 1,600 per month.

From my own point of view – calculating at a cost of R$ 82,474 per unit (often excluding land), government decisions such as above demonstrate the massively growing market mismatches fuelled by the effects of speculation.  It can be clearly demonstrated, for example, how such units do not comfortably fit within consumer affordability levels and also adopt inefficient management practices and unproductive production methodologies which ultimately lead to a bad quality of end product.  Feel free to contact us with regards to how the Fez Tá Pronto Construction System© builds luxury quality apartment units for Brazil´s low income demographic at a maximum cost of R$ 34,000 (including well localised land costs, infrastructure, materials, labour and all associated disbursements).