…“‘We are redirecting our efforts to that lower-middle-income sector,’ said [CEO of Brazilian developer Gafisa]. ‘All the big companies are moving in that direction because it is going to bring us more business. And it’s not a bubble, it’s sustainable. Just look at the demographics.’
…Confirmation comes in the lending figures. The number of houses financed by Caixa Economica Federal Peyrelongue more than doubled in three years, to more than 600,000 last year from 261,327 in 2003. The amount lent by the bank doubled in the first three months of this year over the same period in 2006.
…Banks are lending more thanks in large part to a 2004 law that makes it easier for them to seize property from borrowers who fail to repay their loans. Previously, repossessing homes took banks six to eight years. Now it can take less than a year.
…The only possible downside is the chance that the newfound investment will drive up land prices. …[A]n analyst for Merrill Lynch warned that the influx of cash could push up prices, although he said that such oversupply would probably come only at the higher end of the market and that ‘three to four years out, there is enough pent-up demand to take on the supply.’”*
*“Loan Changes in Brazil Motivate New Buyers and Home Building” – The New York Times, July 5, 2007