The Minha Casa, Minha Vida scheme launched three months ago with the intention of providing affordable housing to Brazils growing middle class has proved a massive success with huge numbers signing up.
Brazilian and International companies are extremely active in this market now, but the market leader is the State Company of Popular Dwellings (CEHAP) which has registered over a 125,000 families keen to purchase their first home.
In Brazils North Eastern state of Paraiba the Brazilian Institute of Geography and Statistics say there are already 21,306 new homes planned for families earning between zero and 10 times the minimum wage. Although this is a substantial number of new dwellings, a survey carried out by the Ministry of Cities in 2008 states that Paraiba needs at least 122,000 new homes, which has been identified by the private development sector.
The State Government of Paraiba is well aware of the latent demand in the state and has pushed through a raft of proposals to allow quicker re-zoning of land to help developers.
This programme has poured R$60bn into Brazil’s housing market and given that the construction industry accounts for 5 per cent of Brazils gross domestic product this programme is giving a valuable boost to employment and earnings.
The Brazilian Government announced that it would plow another R$10 Billion into its flagship affordable housing scheme, Minha Casa, Minha Vida in 2010. The scheme was introduced as a result of the worldwide economic crisis to boost construction and reduce the country’s housing shortage which is estimated to be in excess of 7 million units.
Public funds will be used to subsidize their home purchase, keeping monthly mortgage payments below 10% of the buyers income, with mortgage payments guaranteed by a Treasury fund.
“It is a brave programme and one with a great impact on the Brazilian economy, and it will certainly be one of this government’s main anti-crisis programmes,” said Brazilian Finance Minister, Guido Mantega.
The chief economist of Goldman Sachs has stated that Brazil could be one of the worlds largest economies by 2027
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