A recent note from Itau on the construction and real estate sector in Brazil (highlights by us):

“The construction sector expects 5% growth in 2012, similar to 2011. The main drivers are projects related to the World Cup (as mentioned in the previous section) and government incentives to increase housing demand, such as lower interest rates and the “Minha Casa, Minha Vida” program.

Home sales slowed down throughout 2011, falling from a very fast pace early in the year to a speed that was considered “reasonable-to-good” in the second half. There was further deceleration towards the end of the year, but sales speed has returned to a good level in January and February, in line with the second half of 2011.

The low unemployment rate, even with lower GDP growth, is also a important driver for housing demand. However, sector players are still concerned about the capacity of Brazilian consumers to take on more credit.

At the low-income end, home sales activity remains firm, partly due to the “Minha Casa, Minha Vida” government program. (The bureaucracy associated with these programs has receded marginally, though it still represents a bottleneck for the segment.)

Irrespective of income bracket, there seems to be an established view in the Brazilian housing sector that the phase of aggressive growth rates is behind us and now is the time to consolidate past gains.”

Got it? Translating such a “bearish” note from a serious institution into street talk would be the same as “run to the hills, the bubble has peaked, no one can make money on this anymore.”

A casa pode cair…

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