Minha Casa Minha Vida Boosts Brazil Property Market

Brazil is now 15 months into its emblematic Minha Casa Minha Vida (MCMV) programme. As progress continues on construction and financing of homes, more and more Brazilians are finally able to get their feet on the first rung of the property ladder.

Maria Oliveira, quoted recently in Reuters, is one successful applicant for Brazil’s social housing scheme. She applied for the MCMV programme in Recife, north east Brazil and says that although she had heard lots of publicity about MCMV, she never thought she would actually get one of the homes because “these things are usually so complicated”.

Part of the secret of MCMV’s success has been to facilitate the buying process by removing many of the usual paperwork requirements for both buyers and developers. City councils are key players in the process, particularly in building licence applications. Parnamirim, in north east Brazil, is one example. This relatively small city (its population is around 130,000) already has four MCMV projects underway. The four developments, all of which were started in 2009 thanks to the council’s speedy application process, will provide homes for 1,744 families in the city and most will be finished by the end of this year.

Unsurprisingly, waiting lists of applicants for MCMV projects are long. In Parnamirim, the list of eligible hopefuls runs to nearly 17,000 and the city has several more large MCMV developments in the pipeline and due to start construction this year. In nearby Natal, the waiting list includes almost 68,000 people and like Parnamirim, Natal has started several MCMV projects.

As well as providing much-needed homes, the MCMV programme is also turning out to be a major driver behind the Brazilian economy. In Parnamirim alone, the four MCMV projects currently being built have created 1,000 jobs for locals. MCMV is also big business for the construction materials industry – again in Parnamirim, the 1,744 MCMV apartments require 750 lorry-loads of concrete, 215 tonnes of steel and 40,000 sacks of cement.

Caixa, the government-owned bank and sole financier behind the programme announced that contracts were signed for almost 410,000 properties in Brazil in the first year of the programme. The figure is lagging behind the 1 million homes promised for the end of the year and in some parts of the country, particularly in the built-up areas of the south east; the programme is running behind schedule, mainly because of the difficulty of finding cheap available building land in Brazil. This is not the case in north east Brazil, a region that is currently experiencing big economic expansion.

Obelisk International has recognised the economic potential and the opportunities for investment in this part of Brazil. In Rio Grande do Norte state, Obelisk is involved in several MCMV projects. The state has an allocation of around 57,500 low-income homes and Obelisk currently has over 3,000 units under construction and management within Brazil’s social housing programme.

Investment in Brazil through MCMV offers the tandem of excellent annual returns plus the opportunity to help many Brazilians to fulfil a lifetime ambition. Being able to buy your own home is, for most people in the world, the stuff dreams are made of and the Brazilians are no exception. As Mrs Oliveira says, owning a home is immensely satisfying and she feels as if “she has reached the goal of a lifetime”.

For more information on investing and to find out about Obelisk's latest projects, contact us on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.