Between January and November 2011, Brazilian banks loan contracts for the real estate market (developers and individuals) reached R$ 71.68 billion, up 43.3% over the previous year (R$77.84 million in the 12-month period ending November). Despite a deceleration from March, when growth was around 65%, the real estate loan business remains strategic for banks (click here to see the list of 10 largest home lenders in Brazil).
“It is increasingly difficult to repeat the performance of previous years, but we expect significant growth of this type of loans. It is the fastest growing banking product,” says the vice president of Banco do Brazil, Paulo Rogério Caffarelli. The public bank, controlled by political party PT, estimates that it ended 2011 with a loan portfolio of R$ 7.5 billion, more than twice the one registered in December 2010.
The absolute market leader in the segment is Caixa Economica Federal. Other players are Itaú , Bradesco and Santander… and it seems like there is no sign of a slowdown.
“It is increasingly difficult to repeat the performance of previous years, but we expect significant growth of this type of loans. It is the fastest growing banking product,” says the vice president of Banco do Brazil, Paulo Rogério Caffarelli. The public bank, controlled by political party PT, estimates that it ended 2011 with a loan portfolio of R$ 7.5 billion, more than twice the one registered in December 2010.
The absolute market leader in the segment is Caixa Economica Federal. Other players are Itaú , Bradesco and Santander… and it seems like there is no sign of a slowdown.
How is this chart for real estate loan growth?
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what many dont understand is that, after the pop, those who have been saving to buy something better, bigger, or whatsoever.. will only be able to buy the exact same thing thats selling right now, at the price peak. face it, we all are in gov's hand.
pre-2008 people didnt buy because there was no credit approval.. post-2008 with the credit boom (and prices booming along with it) people dont buy because its "too expensive" reality check: those people will just not buy at all, never. and they will keep on whining their lives off.
everything is expensive in brazil, and now, so are the houses. move out, or face the fact, you live in a fucking utopia. you have to pay 1m $BRL for a damn 90m2 apto.
"pre-2008 people didnt buy because there was no credit approval.. post-2008 with the credit boom (and prices booming along with it) people dont buy because its "too expensive" reality check: those people will just not buy at all, never. and they will keep on whining their lives off."
Your thoughts are very reflective of the mentality in the US leading up to peak RE. The logic is that if I don't buy now, you be able to later because prices keep climbing. Those who held off in the US got much better deals at better financing after the burst. Those who continue to wait might do better still.
If the Brazilian banks continue to lend on over-valued stock then they will run into trouble, as will the market. But it is difficult to see how this will happen as most people know that prices are absurd and some form of correction is needed.
It's better being 1-2 years to early than 1 day to late. When the psycology of the housing market changes you will initially go through a period with very low activity. The buyers and sellers are to far from each other price wise which leads to a freeze of the market. Since the opportunity to rent an apt is still good in SP, I would sell mine now and rent one instead. My family living in midwest US just bought a 2nd home for 17'000 USD, copmared to 80KUSD in Q2 2008, that the rent to people not willing to buy yet for diffrent reasons.
Good point, Ruban: the problem is lending at an over-valued price.
As to what Jayme said, I disagree. Had many friends and acquaintances (many of them Brazilian) tell me the same thing in the US back in the good ol'days. They are not making more land…real estate only goes up….buy now or be locked out forever…
well, the majority of those people are now completely bankrupt, or worse yet, they just walked away from their "great" pre 2008 deals…
it is just a matter of time. Good real estate investment, like many other things, is a combination of proper timing, income and credit, with income being the determinant factor in the long run.
Jai(y)me, seu inglês é horroroso. Quem sabe vc ainda consegue virar garoto propaganda da pepsi.
anonymous…. you got the message from jaime right? ok, so forget about is english and stop been so "armani" while most brasilians dont even know how to read and write correct PORTUGUESE.