International Housing Association

JOSÉ CARLOS MARTINS
PRESIDENT OF CBIC
IHA Secretariat
ABOUT US
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Headquartered in Brasilia, Brazil, the Brazilian
Chamber of the Construction Industry (CBIC) is
81
made up of
unions and employer associations
in the construction industry from all 26 Brazilian
states and the Federal District. Membership in CBIC
is voluntary, and the entity serves as the industry’s
representative body at the international level. The
Chamber is a member of the Inter-American
Federation of the Construction Industry (FIIC), an
affiliate of the Confederation of International
Contractors’ Associations (CICA).
THE BRAZILIAN ECONOMY
3
2014
POPULATION
GDP
GDP PER CAPITA
MINIMUM MONTHLY SALARY - 2016
INFLATION
BASIC INTEREST RATE - END OF PERIOD (%/year)
202.8 million
US$ 2.4 trillion
US$ 11,913
US$ 218
10.67%
14.15%
Source: Brazilian Institute of Geography and Statistics (IBGE), Annual Social Information Report (RAIS)/Ministry of Labor and Employment
(MTE), Brazilian Central Bank
Note: Exchange Rate R$ = US$ 0,4247 (average in 2014); Minimum Monthly Salary – 2016 Exchange Rate R$ = US$ 0,2474 (January 2016 )
Note: Exchange Rate 2014 Average; Prepared by: CBIC
GDP vs. INFLATION
4
Source: Brazilian Institute of Geography and Statistics (IBGE) – Brazilian National System of Accounts .
* Results computed based on Quarterly National Accounts (Contas Nacionais Trimestrais).
**Brazilian Central Bank Projections. Prepared by: CBIC.
POLITICAL AND ECONOMIC
CHALLENGES
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Political Disputes
 Unstable Administration

 Anti-Corruption
Low Investment
 High Inflation

Operations
HOUSING OVERVIEW
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Monthly Household Income
Category (minimum monthly
salaries)
up to 3
more than 3 up to 5
more than 5 up to 10
Share of Housing
Deficit (%)
82,5
10,1
5,6
Number of
Units
4.480.214
548.487
304.111
In 2014, a total of 1.8 million new families were formed (PNAD 2014)
Source: João Pinheiro Foundation (FJP), Statistics and Information Center (CEI). Prepared by: CBIC
PROFILE OF COMPANIES
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WORKFORCE AND ESTABLISHMENTS
BY SIZE - 2014
Size of est ablishm ent by t ot al act ive
work force
Up t o 4
5 to 9
10 to 19
20 to 49
50 to 99
100 to 249
250 to 499
500 to 999
1 .0 0 0 or m ore
TOTAL BRAZI L
Civil Const ruct ion (*)
SUPPLY OF WORKERS
ESTABLI SHM ENTS
TOTAL BY
CATEGORY
203.569
217.326
292.393
474.999
378.754
465.233
314.535
252.612
420.006
3.019.427
CUM ULATI VE
203.569
420.895
713.288
1.188.287
1.567.041
2.032.274
2.346.809
2.599.421
3.019.427
-
%
6,7%
13,9%
23,6%
39,4%
51,9%
67,3%
77,7%
86,1%
100,0%
-
TOTAL PBY
CATEGORY
157.510
33.094
21.608
15.664
5.487
3.069
918
373
196
237.919
CUM ULATI VE
157.510
190.604
212.212
227.876
233.363
236.432
237.350
237.723
237.919
-
%
66,2%
80,1%
89,2%
95,8%
98,1%
99,4%
99,8%
99,9%
100,0%
-
Source: Annual Social Information Report (RAIS) 2014 – Ministry of Labor and Employment (MTE)
Prepared by: CBIC.
Note: Based on new National Classification of Economic Activities (CNAE) 2.0/Brazilian Institute of Geography and Statistics (IBGE).
REAL-ESTATE FINANCING
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CONDITIONS
SOURCE
Income up to 3 Minimum Monthly Salaries
Properties up to U$ 68,900
Federal Budget - category !
Government Severance Indemnity Fund (FGTS) category 2 and 3
COST
Subsidy up to US$ 22,800
up to 8% a.a.
Properties up to U$ 224,800
Brazilian Savings and Loan System (SBPE)
12% a.a.
Properties greater than
U$ 224,800
Non-Earmarked Resources
Market
Source and Prepared by: CBIC.
Note: Exchange Rate R$ = US$ 0,2998 (average in 2015)
FGTS
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



Mandatory deposit by companies into specific account for individual employees
equal to 8% of monthly salary
Principal means of withdrawal:
 Dismissal without cause
 Retirement
 Purchase of own home
Investments in fund are for real-estate credits (up to 10 minimum monthly salaries)
and urban development
Total assets on 11/30/15:
 U$ 136.7 billion
Source: Federal Savings Bank (Caixa Econômica Federal) – FGTS Channel
Note: Minimum Monthly Salary in 2016 = US$ 264 (Exchange Rate R$ = US$ 0.2998)
Prepared by: CBIC
SAVINGS ACCOUNTS
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



Most common investment in Brazil ( 6% )
Financing for properties up to U$224,800
Total Assets: US$ 196.8 billion
In 2015, savings accounts lost US$ 16.1 billion – due
to high basic interest rates
Source: Brazilian Central Bank
Note: Exchange Rate R$ = US$ 0,2998 (average in 2015)
Prepared by: CBIC
CHARACTERISTICS
OF REAL-ESTATE FINANCING
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





Means of amortization – Constant Amortization
System (SAC)
LTV – 62 % ( 2015 )
Default – 1.9% ( 2015 )
+ 90 % financing for own use
Fixed interest over the contract
9,6 % real estate credit / gdp
CONSTANT AMORTIZATION
AND FRENCH SYSTEM
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Financing Amount
No. Installments (months)
Monthly Rate
Prepared by: CBIC
100,000.00
360
0.797%
REAL ESTATE FINANCING
13
Source: Federal Savings Bank (CEF) – FGTS Channel, Brazilian Central Bank; Brazilian Association of Real-Estate Credit and
Savings Entities (ABECIP), Integrated Financial Administration System (SIAFI)/Secretariat of the National Treasury (STN), Budget
Consulting and Advisory Office of the Brazilian Chamber of Deputies.
Prepared by: CBIC
Note: OGU = amounts earmarked in subsidy and transfer actions. Exchange Rate R$ = US$ 0,2998 (average in 2015)
In 2015 amounts, adjusted for inflation (IPCA)
FUNDED UNITS
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CONTRACTED UNITS (thousands)
TRANSACTION
CATEGORY 1
CATEGORY 2
CATEGORY 3
TOTAL PMCMV
SBPE - SAVINGS
TOTAL PER YEAR
2009
2010
2011
2012
2013
2014
MY HOUSE MY LIFE PROGRAM - PMCMV
2015
TOTAL
143,9
98,6
43,8
338,8
277,2
102,8
104,3
326,0
77,9
389,1
312,0
97,7
558,0
288,7
93,8
175,3
289,7
37,6
16,9
344,7
40,5
1.726,2
1.936,8
494,2
286,3
297,9
584,2
718,8
416,3
1.135,2
508,2
487,0
995,2
798,7
453,2
1.252,0
940,5
529,8
1.470,3
502,6
538,3
1.040,9
402,1
341,5
743,7
4.157,3
3.064,1
7.221,4
ANNUAL PRODUCTION OF HOUSES
-
1,87 MIllion
Source: Brazilian Central Bank; Brazilian Association of Real-Estate Credit and Savings Entities (ABECIP), Federal Savings Bank
Prepared by: CBIC
CURRENT REAL ESTATE MARKET
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

Negative Points:
 Unemployment
 High market interest rates
 Shortage of financial resources
 Banking concentration
Positive points:
 My House My Life Program
 Legislation – greater guarantees for investors/lenders
 High deficit
 Social Mobility
 Cultural change
Thank You!
IHA Secretariat
www.cbic.org.br
jcmartins@cbic.org.br
denise.soares@cbic.org.br
Phone +556133271013