Brazil's homebuilders delay new projects as COVID-19 hurts sales: CBIC

People exercise as the state extended holidays amid the outbreak of the coronavirus disease (COVID-19) in Sao Paulo, Brazil, May 20, 2020. REUTERS/Amanda Perobelli

SAO PAULO (Reuters) - Brazil’s real estate industry has seen home sales fall in recent weeks amid the coronavirus pandemic, but expect prices to remain firm as new projects are postponed to adjust supply to lower demand in coming months, the local chamber of construction CBIC said on Monday.

“We don’t see prices falling even during the pandemic... There are no conditions for that,” CBIC’s president José Carlos Martins said in a webcast with representatives of the sector.

A poll conducted by the chamber of homebuilders in 118 Brazilians cities, including Sao Paulo, the country’s largest real estate market, showed that 79% of the companies plan to delay new projects.

In the first quarter, the number of new projects launched fell 14.8% compared with the same period a year ago because of growing uncertainties amid the outbreak, CBIC’s vice-president Celso Petrucci said in the same webcast, adding the drop further accelerated to 63% in April.

Sales have also felt the economic fallout from COVID-19, dipping 38.8% in April after a 26.7% rise in the first quarter, according to the poll.

But CBIC sees the real estate industry suffering less than other sectors, given Brazil’s high level of housing deficit and the likely reduction in mortgage interests.

“We will not suffer as much as the automakers because we deal with housing needs, not consumption desires,” Petrucci said.

According to Martins, state-run lender Caixa Econômica Federal [CEF.UL] has indicated that it will soon lower its mortgage rates following the central bank’s decision to cut Brazil’s benchmark rate to a record-low of 3% earlier in May.

Reporting by Gabriela Mello; Editing by Nick Zieminski