The new Regulations which were introduced in 2005 have had a real impact on real estate market in Brazil. The real estate market became more democratized and more realistic for low-income groups to get onto the property ladder.
According to Abecip (the Brazilian Association of Real Estate and Savings Institutions), The loan activity in the sector has soared and the number of real estate loans has increased from 53,787 in 2004 to 195,900 in 2007. Jose Carlos Oliveira, professor of economics at the University of Brasilia, told the Latin Business Chronicle that the changes revolved around real estate guarantees. The government permitted banks to possess the property until the borrower had repaid their loan completely and the buyer becomes the owner only after he has paid off the loans. This results in the person who provides the funds to have a further impetus because he can pick up the property in case of non-payment.
The regulations of Brazilian central bank according to conditions specified by the SFH (the Housing Financing System), 65% of all the government’s savings had to be given for housing credits. The remaining credits should be offered at present market rates and used for funding residential real estate.
The government anticipates that the regulations will cheer up the investors who are looking for property for sale in Brazil.
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