Rio de Janeiro, Brazil – Minha Casa, Minha Vida
("My House, My Life") Research (July 2013)
Government subsidies are not enough to encourage private sector involvement
Minha Casa, Minha Vida Sales Rio de Janeiro State Comparables (July 2013 Analysis)
Construction Area (m²)
Unit Value (R$)
Cost/m² (R$)
Itaboraí (RJ)
46
88,400
1,921.74
Minha Casa, Minha Vida - Apartment
Engenho Novo (RJ)
49
165,000
3,367.35
Minha Casa, Minha Vida - Apartment
Campo Grande (RJ)
46
115,000
2,500.00
Minha Casa, Minha Vida - Apartment
São Gonçalo (RJ)
45
102,000
2,266.67
Minha Casa, Minha Vida - Apartment
Duque de Caxias (RJ)
50
157,400
3,148.00
Minha Casa, Minha Vida - Apartment
Nova Iguaçu (RJ)
45
100,000
2,222.22
Minha Casa, Minha Vida - House
Niterói (RJ)
41
79,000
1,926.83
Minha Casa, Minha Vida - Duplex House
Campos dos Goytacazes (RJ)
59
111,753
1,894.12
Minha Casa, Minha Vida - Apartment
Belford Roxo (RJ)
44
107,000
2,431.82
Minha Casa, Minha Vida - Apartment
São João de Meriti (RJ)
45
110,000
2,444.44
Minha Casa, Minha Vida - House
Volta Redonda (RJ)
50
130,000
2,600.00
Minha Casa, Minha Vida - House
Majé (RJ)
66
100,000
1,515.15
Minha Casa, Minha Vida - Apartment
Macaé (RJ)
45
92,000
2,044.44
Minha Casa, Minha Vida - Apartment
Cabo Frio (RJ)
45
135,000
3,000.00
Minha Casa, Minha Vida - Apartment
Barra Mansa (RJ)
49
115,000
2,346.94
Minha Casa, Minha Vida - Apartment
Mesquita (RJ)
55
127,000
2,309.09
Minha Casa, Minha Vida - Apartment
Teresópolis (RJ)
50
91,700
1,834.00
Minha Casa, Minha Vida - Apartment
Rio da Ostras (RJ)
48.34
116,000
2,399.67
Minha Casa, Minha Vida - House
Araruama (RJ)
62
110,000
1,774.19
Minha Casa, Minha Vida - Apartment
Recanto (RJ)
45
132,300
2,940.00
49.267
114,228
2,344.33
Classification
Location
Minha Casa, Minha Vida - Apartment
AVERAGE
Launched in 2009, one of the primary objectives of Brazil’s
Minha Casa, Minha Vida (MCMV) was to provide means
tested subsidies and unprecedentedly low interest
mortgage rates to both help low income families get on the
housing ladder and also incentivise the construction sector
via competitive development finance options. Yet,
following a series of acquisition value extensions, with the
ceiling currently standing at R$ 190,000, the majority of
developers working within the ambit of the program have
ignored where the real focus of attention should lie: the 1-3
minimum salary groups (families currently earning between
R$ 678 and R$ 2,034 per month).
As a demonstration, the table to the left tracked 20 open
market values of units in Rio de Janeiro state offering access
to subsidies and/or low interest rates. Producing an average
open market value of R$ 114,228 (R$ 2,344 per m² for a
49.27m² apartment unit), inputting a familial salary base of R$
1,356 per month in one of our primary regions of operation –
Campos dos Goytacazes – into the Caixa Econômica
Federal simulator demonstrates that, whilst a monthly
mortgage instalment of R$ 406.79 may be affordable, the
requirement of a R$ 57,351 down payment would be
unrealistic for the significant majority of this most needy
population group. These units are, in reality, being
constructed for families earning 4 minimum salary multiples
and above which – outside certain cities with established
industrial presence – is serving to exacerbate heavily
speculative nature of the current market.
Whilst 1-3 minimum salary demands are, to a certain extent,
being responded by Residential Leasing Fund (Fundo de
Arrendamento Residencial, FAR) a range of practically-related
inefficiencies have become increasingly exposed – bring
major doubts as to how sustainability can be genuinely
achieved.