Rising near-term risks in the lower-income housing sector

Overview

One year after the launch of the Lula administration’s low-income housing stimulus programme Minha Casa, Minha Vida Phase 1, financing for an additional two million homes by 2014 is being planned under Phase 2. Although demand fundamentals for Brazil’s housing sector remain bright, the outlook for the country’s lowest-income segment will be clouded by rising inflation in the near and medium terms. This could curtail growth unless the post-Lula government adjusts its budget or finds new...