Mexico homebuilders keep '08 outlooks despite loans

By Gabriela Lopez

MONTERREY, Mexico, Nov 29 (Reuters) - Three of Mexico's leading homebuilders are maintaining their sales growth forecasts for next year, despite a flat outlook for loans from the country's government-backed home agency. Infonavit announced on Wednesday it planned to give out between 500,000 and 540,000 mortgages next year, in line with this year's target, but lower than market expectations of between 600,000 and 650,000.

The announcement hit homebuilding stocks on Thursday, with Homex, Geo, Sare, Urbi and Ara all down.

"There is a notable reduction in the number of credits that had originally been suggested," said Jaime del Rio, director of investor relations with the builder Ara (ARA.MX).

"This change, which had been seen coming, possibly could have an impact, but for now we are sticking to our guidance of growth of 10 percent in revenue for 2008."

A spokesman for Geo (GEOB.MX), the largest house building company in Mexico, said it was holding its sales growth figure for 2008 at between 12 percent and 14 percent because it was already based on the Infonavit forecast.

Urbi (URBI.MX), another leading homebuilder, was also maintaining its 16 percent sales growth outlook for 2008, according to a company spokesman.

But analysts said the Infonavit outlook was negative for the sector, as it is by far the biggest home lender in Mexico.

"A more conservative program from Infonavit ... is negative news for the sector," said Santander analyst Gonzalo Fernandez in a report.

Homex (HOMEX.MX) shares dropped 4.54 percent on Thursday to 87.12 pesos, Geo stock fell 4.24 percent to 33.20 pesos, Ara moved down 2.09 percent to 10.70 pesos, Urbi (URBI.MX) declined 1.28 percent to 35.02 pesos and Sare (SAREB.MX) lost 1.10 percent to 15.25 pesos.

But analysts said the Infonavit plan had some rosy elements, such as the proposal to increase the average home loan 33 percent to 319,000 pesos ($29,214) in an attempt to improve the quality of the homes.

"Growth now is going to come via the increase in the amount of the loans and not via the volume of credits," said Carlos Hermosillo, an analyst with Vector brokerage.

(Editing by Andre Grenon)

((chris.aspin@reuters.com; +52 55 5282 7153; Reuters Messaging: chris.aspin.reuters.com@reuters.net)) Keywords: MEXICO HOUSING/

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