Brazilian Housing Explosion Continues
The Brazilian Governments hugely successful Minha Casa, Minha Vida scheme which was launched 12 weeks ago with the intent to provide affordable housing for the rapidly expanding middle class in Brazil has seen record numbers signing up to the scheme.
The State Company of Popular Dwellings (CEHAP), which is leading the development of the affordable housing boom in Brazil, has had 125,811 families register so far. Other Brazilian companies and international developers are also joining this booming market.
There are currently in excess of 21,000 new homes planned and approved in Brazils North Eastern state of Paraiba states the Brazilian Institute of Geography and Statistics. This has led to great interest from private developers interested in the affordable housing arena as a report from the Ministry of Cities in 2008 states that Paraba needs at least 122,000 new homes.
The State Government of Paraiba is well aware of the latent demand in the state and has pushed through a raft of proposals to allow quicker re-zoning of land to help developers.
This programme has poured R$60bn into Brazil’s housing market and given that the construction industry accounts for 5 per cent of Brazils gross domestic product this programme is giving a valuable boost to employment and earnings.
Affordable housing is a major focus for the Brazilian Government, which this week announced that following reallocation of funding, it will dedicate 10 Billion Reais to the Minha Casa, Minha Vida initiative in 2010. The progamme is designed to boost the construction sector to offset the effects of the global economic crisis and alleviate the country’s housing shortage which is reported to be as much as 8 million countrywide.
The key to this scheme is the Government providing subsidies of up to 90%, which keeps the buyers mortgage payments below 10% of their income. Mortgage payments are guaranteed by a Treasury fund.
Brazilian Finance Minister, Guido Mantega says that Minha Casa, Minha Vida is the one of the Governments core anti-crisis schemes and will have a huge impact on the Brazilian economy.
The chief economist of Goldman Sachs has stated that Brazil could be one of the worlds largest economies by 2027
Leslie Richards is a land consultant to Brazil land Invest and wrote this article on the Affordable Housing sector in Brazil and recommends you visit Brazil Land Invest for more in depth information information about investing in this exciting investment sector.