According to news site O Globo, the huge loss in market value of Brazilian construction companies will push down the prices of unsold homes.

As the pace of real estate sales has been falling throughout the country, construction companies have no option but to reduce prices to generate the so-needed working capital, internal sources in the market admit.

“There may be a cut of real estate prices in order to liquidate the current stock and generate cash flow,” says Joao Paulo Matos, the president of homebuilder Calçada.

In the last few months, it was already common to see sales strategies like discounts of 20%, no upfront payment, documentation fee waivers, and bonuses in order to attract consumers and reduce the accumulated inventory stock.

In fact, this year the builders began controlling the pace of project launches in order to not”flood” the market with so many properties and create excess supply. The overall property launches in rio de Janeiro have already fallen 37%  in the first quarter.

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