By Ana Mano
SAO PAULO: Brazil’s housing starts rose sharply in October in a sign that homebuilders believe the worst of Brazil’s recession may be coming to an end, a real estate research report said on Tuesday.
The widely followed Abrainc-Fipe index showed a 25.9 percent rise in the launch of new home construction projects in October from the same month in 2015. In September, housing starts had plummeted 25 percent against the year-earlier month.
Home sales fell 2.5 percent to 7,500 units for the month, university research center Fipe and industry group Abrainc said in a joint statement.
The so-called VSO indicator, which gauges sales as a share of total units available for purchase, slipped 0.8 percentage point to 6.1 percent, indicating available inventory would cover 16.3 months’ worth of demand, according to the report.
Sales cancellations, which have been weighing on homebuilders’ earnings this year, fell to 3,600 units in October, 17.3 percent lower than a year earlier, a positive sign for an industry hurt by low credit availability and high mortgage rates.
The Abrainc-Fipe indicator, launched in August 2015, is the first national index for the real estate sector, compiling data provided by 20 of 34 Abrainc associate members operating in Brazil. (Editing by W Simon)
Source: Reuters