SAO PAULO, Dec 6 (Reuters) - Brazilian homebuilder Construtora Tenda SA hopes to boost spending on land acquisitions by 25 percent in 2018 as the country’s lower end real estate market begins to rebound, executives said on Wednesday.
Speaking to investors and analysts in Sao Paulo, Renan Sanches, a Tenda financial executive, said sales launches of new housing projects should also jump by 10 percent to 15 percent next year.
Shares in Brazil’s homebuilders, including Tenda, have performed well in recent months, boosted by falling mortgage rates, solid personal savings data, and a leveling off of purchase cancellations. On Wednesday, the Housing Union of Sao Paulo, known as Secovi-SP, said property sales launches increased by 10 percent in 2017, and should grow again in 2018, though the exact amount would depend on credit availability.
“Next year, (land acquisition investments) should grow 25 percent, without going above 200 million reais ($61.7 million),” Sanches said.
This year, Tenda, whose shares have jumped almost 20 percent since it was spun off from developer Gafisa SA in May, is set to spend 100 million to 130 million reais on land acquisitions, with new home sales launches reaching 1.6 billion reais, a 20 percent jump from the previous year.
In 2018, the developer, which already operates in seven cities from Porto Alegre in Brazil’s south to Recife in the north, hopes to begin operations in a new, unspecified city, Chief Executive Rodrigo Osmo said.
As Brazil’s government attempts to improve its fiscal health, questions have been raised as to whether the state will reduce its considerable support for the low-income real estate market.
Osmo said the company believed it unlikely that the government would eliminate its so-called 1.5 bracket of the Minha Casa, Minha Vida housing subsidy program, which is key to Tenda and other homebuilders. However, he added, Tenda has developed a contingency plan, which would include focusing on bracket 2 of the program, which offers less generous subsidies. ($1 = 3.24 reais) (Reporting by Gabriela Mello; Writing by Gram Slattery; Editing by Richard Chang)