With a low inventory, pent-up demand and record levels of new mortgages, property in Ceará, northeast Brazil stands out in the Brazilian property market. Market conditions are so buoyant in the state that Ceará property is known as an “oasis”.
According to Mark Novaes, President of Coopercon-CE (the Ceará civil construction cooperative), Ceará has ideal conditions for a healthy property market. In terms of inventory levels, the state has one of the lowest in the country. Coopercon-CE estimates that it would take a year to sell all property in Ceará against two years for Brazil as a whole and four years in some states where there’s excess housing supply.
Ceará also has very strong pent-up demand for housing. Coopercon-CE calculations point to a deficit of 120,000 properties in Fortaleza alone, a figure that is considerably higher when the whole state is taken into account.
And this demand remains despite high levels of development in Ceará and record numbers of new mortgages. In the 12 months to January this year, the number of units launched in the state reached 13,899, a 32 per cent increase on the previous 12 months. In terms of financing for new homes, mortgages in Ceará totalled R$2.7 billion between January 2013 and January 2014. This represents a rise of 25 per cent compared to the 2.9 per cent seen in Brazil as a whole.
The number of units launched in Ceará during January this year fell slightly compared to January 2013, but Novaes believes this is a sign of a healthy market. “We fully expect the market to slow down slightly as it adjusts to supply and demand levels within the state,” he said in declarations to local press. He also pointed out that the Ceará market is traditionally slower during the first half of the year when 40 per cent of business is done, compared to the 60 per cent carried out between July and December.
Within this scenario of an oasis in the Brazilian property market, Coopercon-CE plans to focus on developments that are clearly tailored to clients’ demands. “This year, we can’t launch just any product; we need to focus on matching each and every product to the right demand,” he said. The cooperative has just sent a series of funding proposals to Brazilian banks and expects to gain R$1 billion in new credit lines.
Sources: IBRAFI & ABECIP