| SAO PAULO
SAO PAULO Jan 21 Mortgage loan disbursements
are expected to rise 15 percent this year, about half the pace
observed in 2013, with home prices also losing steam after years
of steep increases, an industry group said on Tuesday.
Local financing for home purchases soared 32 percent last
year to an all-time high of 109.2 billion reais ($46 billion),
Abecip, the group representing mortgage lenders, said in a
statement. In December alone, loans extended to home buyers rose
17 percent on an annual basis, the group said.
About 529,800 home units were sold last year using credit,
or 17 percent more than in 2012, with house prices rising more
than twice as fast, Otavio de Lazari Junior, Abecip's president,
said in a news conference.
While prices will keep rising, "the pace of increase is
unlikely to accelerate" in coming months, Lazari said. Prices
rose last year partly due to a shift in the profile of new
projects - some of which included more leisure areas, - and a
decision by homebuilders to pass through rising costs, he said.
The data underscore a trend of moderation in a market that,
for the previous five years, was Brazil's fastest-growing
lending segment. In the last months of 2012 and throughout the
first half of last year, mortgage loan disbursements cooled in
the wake of a jump in consumer debt levels, an economic slowdown
and the beginning of a cycle of interest-rate hikes by the
According to Lazari, inflation-adjusted housing prices in
Brazil surged 55 percent in the past decade. He rejected the
view that Brazil's real estate market is experiencing a price
bubble - an assertion made by several analysts including Yale
University Professor Robert J. Shiller, a Nobel Prize winner in
2013 who predicted the collapse of the U.S. housing market.
Mortgage loans are a favorite segment of state-run and
private-sector banks because, as opposed to most consumer
credit, borrowers have to put up their homes as collateral.
Mortgages represent about 7 percent of Brazil's outstanding
credit, compared with less than 2 percent a decade ago,
according to central bank data.
State-run Caixa Econômica Federal is Brazil's largest
mortgage lender with about two-thirds of the market. Housing
loans at the Brasilia-based lender rose about 40 percent last
year, executives told Reuters recently.
Data from other research institutes validate Lazari's
assertion that prices are losing momentum in a gradual manner.
Home price rises in Brazil's 16 largest metropolitan areas
are clearly on a slowing trend, while public data might be
masking further weakness in some housing segments, Deutsche Bank
Securities analysts said in a report on Wednesday.
Last year, the average price per square meter hit 7,815
reais in São Paulo, Brazil's most populous city, and 9,937 reais
in Rio de Janeiro, amounting to an average 13.5 percent annual
increase, the Deutsche Bank report said, citing data from a
survey conducted by the University of São Paulo and real estate
website Zap Imóveis.
Prices rose at an annual average of over 20 percent between
2008 and 2012, according to the Fipe-Zap index.