The São Paulo City Government has announced the commencement of a detailed investigation of suspected fraud and tax evasion being undertaken by a number of prominent Brazilian real estate development companies estimated at a total value of R$ 100 million.
The number of complaints made to the Procon organisation against Brazil property constructors and incorporators has continued to rise, hitting 1,981 for the first half of 2011 in São Paulo alone, where the majority of the country´s main players have ongoing projects – rising by 26 percent compared to the same period of last year.
Research by the São Paulo Regional Council of Real Estate Brokers (CRECI-SP) and the Foundation Institute of Economic Research (FIPE) has pointed that even whilst rental figures for housing in Brazil’s two largest cities (Rio de Janeiro and São Paulo) has increased, such numbers are significantly less when considered proportionately to the rise in overall prices.
Recent evidence has pointed to noticeably rising property and land values in one of Rio de Janeiro’s largest regions of favelas communities (urban neighbourhoods consisting of badly structured and poor quality housing, usually located in the city peripheries). Much of the news has been attributed to the recent pacification programmes undertaken in several regions deemed at risk by the city government.
A recent report in Brazil´s Globo newspaper pointed to increasing occurrences of delays happening on the delivery of real estate projects – interviewing a number of home buyers affected in one of the most prominent regions of the country, São Paulo.
One of Brazil’s leading property development companies – Gafisa – has been streamlining and restructuring its system of processes in line with what is estimated will be a continued strong demand for housing (the company is expecting a 20 percent growth rate in sales when compared to 2010).
According the Department of Statistics and Socioeconomic Studies (Dieese), the pace of real time earnings levels of the Brazilian work force looks set to slow down in 2011.
A survey by the Brazilian Company of Heritage Studies (EMBRAESP), demonstrated that the number of new real estate launches in the São Paulo region taking between 30 and 45 months for keys to be handed over to buyers has increased by 15 percent. Data released by the Justice Tribunal of São Paulo also pointed out that the number of court cases being taken against real estate developers increased from 202 to 500 between 2008 and 2010.
A March 2011 analysis in conjunction with Urban Systems and PricewaterhouseCoopers (PwC) – examining existing and projecting future works in Brazilian city centres – demonstrated that a considerable amount still needs to be undertaken. The research concluded that a total of R$ 330 billion (US$ 198 billion) investment will be necessary to bring Brazil’s cities in line with developed economies of the world by 2025.
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