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SAO PAULO, Oct 5 (Reuters) - Brazil's depressed homebuilding market could see the start of an upswing next year as developers regain confidence, Lucas Vargas, chief executive of online classifieds VivaReal, told Reuters.
Brazil's worst recession in decades has led to record home sales cancellations, a reduction in new developments and some homebuilders filing for bankruptcy protection.
Even so, economists expect Latin America's largest economy to emerge from recession in 2017 as inflation eases and the central bank slashes interest rates.
In its monthly survey on the state of the retail market released on Wednesday, VivaReal said that high borrowing costs and unemployment were discouraging home buyers and making cheap rents a more attractive option for many Brazilians.
Rents in Brazil are among the lowest in the world, averaging 6 percent of the value of a home compared with 7 or 8 percent in the United States and Europe, Vargas said.
In the third quarter, rents dropped by 5.6 percent from a year earlier, the lowest level since VivaReal started keeping records in June 2013.
"We are seeing a return of homebuilder confidence but this optimism is not necessarily shared by the consumers," Vargas said. "We could be talking about the start of a new sales cycle in a year."
Homebuilders such as Cyrela Brazil Realty SA said in August that sales cancellations, at a historic high of 25 percent, should only drop in the medium term.
Mortgage loans totaled 3.8 billion reais ($1.2 billion) in July, a 60 percent decline from April 2015, just before Brazil's largest mortgage lender, Caixa Economica Federal, changed lending rules, VivaReal said.
Demand for apartments between 50 and 100 square meters remains higher than the available stock, a niche that homebuilders could explore once interest rates come down, according to the VivaReal survey, which analyses 5 million ads on its platform in 30 cities.
In a positive sign for the housing market, the closely watched Fipezap index showed the biggest monthly increase in home prices in 14 months in September - though it noted prices were still falling in several major cities.
Brazil's mortgage market represents a mere 9.6 percent of gross domestic product, much less than levels in Britain and the United States, according to Abecip, an association representing real estate lenders.
$1 = 3.2198 reais Reporting by Ana Mano; Editing by Leslie Adler