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).
Perhaps more so over the last year, it has become increasingly acknowledged and accepted by all involved in the Brazilian property sector that a period of cooling off is impending – whether this would be via the early 2012 statements of the country´s leading developers slowing down their launch / operational plans; the inefficiencies of the Minha Casa, Minha Vida programme; issues related to the contraction of labour or a number of other contributory factors. Whilst the question as to if Brazil´s bubble burst will be as impactful as what occurred in Europe and the USA is another debate, it is worth looking a few of latest circulating arguments related to housing accessibility in order to understand the realities.
January 27th, 2012 by
Ruban Selvanayagam
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The last week of January 2012 saw the mass eviction of thousands of families residing in favelas (slums) in the Pinheirinho district of São José dos Campos, São Paulo state. Behind a smokescreen of bringing “security” as a result of the resistance, the heavy handedness of Brazil’s military police was well documented and can be viewed all over news sites and YouTube with residents being forcibly removed using tear gas bombs and rubber bullets in addition to regular beatings, police brutality and little opportunity to collect belongings prior to the swift commencement of demolitions – leaving huge senses of loss, irrationality and injustice.
As a result of Brazil´s hugely negligent construction industry practices related to environmental respect, should statistics indicated by the Institute of Geography and Statistics (IBGE) be understood, based on 2010´s practices (when real estate activity was particularly high), from the waste created as a result of the construction of three buildings in Brazil there would be enough to construct an entirely new one.
Two press clippings (extracted in December 2011 from Brazil´s Folha newspaper) that demonstrate how the rapid growth of property prices in Brazil has filtered through to the country’s favela communities – with rental figures that are very arguably beyond feasible affordability levels of the country´s low income groups. Due to the existence of very few other housing options, most residents do not have any choice but to pay such sums for what are plainly appalling and sub-humane living conditions.
January 20th, 2012 by
Ruban Selvanayagam
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After the 2011 events in Pernambuco, this week saw the initiation of more strikes by over 10,000 real estate construction workers on 100 building sites in the northern eastern state of Piauí on the basis of a salary readjustment that should have occurred in November 2011 – in addition demanding better working conditions, health plans and transportation vouchers.
Whist Brazil is not a nation with a noticeable susceptibility to natural disasters, on 12th January 2011 the Serra region in the state of Rio de Janeiro was hit by unprecedented rains which killed an estimated total of 1,133 people and displaced many more. Much of the damage done was not merely due to the weather itself but more to a lack of preventative measures against the forces of nature as well as the abundance of highly vulnerable homes on unsafe hills highly prone to mudslides (a common location of the country´s favelas).
a short news bulletin via Paraná state TV which demonstrates the bad workmanship and other related issues on a donated social housing project under the Minha Casa, Minha Vida (MCMV) (“My House, My Life”) initiative in Cascavel, Paraná as well as commentary with regards to analysis undertaking on unit costs.
The administrators of the social housing programme Minha Casa, Minha Vida (“My House, My Life”) have announced that the construction of 6,940 houses in Salvador (Bahia) has been stopped due to a reported “absence of liquidity” of the two construction companies involved. In the first week of January, executive director of the Caixa Econômica Federal Teotônio Rezende visited the project to examine what steps could be taken – but the issues have been well known since September 2011.
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:
