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Affordable housing programmes 'help construction firms'

Date added: 5th November, 2009 at 09:29
(view all articles from November, 2009)

Government investment in Brazil's affordable housing programme is benefitting construction firms across the country.

One such company is Sao-Paulo-based Tenda, which offers low-earning Brazilian families the chance to buy property in Rio de Janeiro and 63 other cities across 13 states in the Latin American country.

Under the Minha Casa, Minha Vida (My House, My Life) project, people without the money to buy property in Brazil can have up to a 25 per cent reduction in the price of a flat.

Tenda represents prospective home buyers earning around 400 reais (£141) a month, which accounts for than 52 per cent of families.

Although the affordable homes scheme was only launched in April, the Financial Times reports it has been a huge success and has led to a significant increase in property purchases.

The company's second quarter earning figures are testament to this, as it reported a 45 per cent increase in sales over the first three months of 2009.

It also saw an 18 per cent rise compared with the same period in 2008, taking its total revenue to 366.8 million reais.

More is to come, the company's chief executive Carlos Trostli predicted, adding that the construction firm's figures could see even higher growth by the end of the year.

Despite the fact that there are more than 9,000 building firms currently operating in the South American country, Mr Trostli explained that there is more than enough business to go round.

With Tenda accounting for between four to six per cent of the overall property market, he said: "There is such abundance in the market that share is not the name of the game."

Affordable housing customers can visit one of Tenda's 30 shops located across Brazil, which the writer David White noted looks like a "busy travel agency".

The store in Rio de Janeiro contains an upstairs show home, which Mr White pointed out is necessary because all of the finished properties on the company's books have already been sold.

Using this method, Tenda also removes the cost of staffing sales offices at individual locations around Brazil.

Buyers complete a dossier in the shop, which is then passed on to affordable housing lender Caixa Economica Federal for approval.

Mr Trostli explained that by building to plan and using aluminium moulds for the concrete construction, a new block of flats can be completed in just four months.

"This is how we want to transform the industry and give high volume to the market," he said. ADNFCR-1477-ID-19444229-ADNFCR