Brazilian Housing Market Grows 15% Despite High Interest Rates

The Brazilian Chamber of Construction Industry (CBIC) reported a 15% increase in real estate sales and launches during the first quarter of 2025.

Government housing program “Minha Casa, Minha Vida” drove this growth, accounting for 53% of new launches and 47% of total sales between January and March.

Brazil’s construction sector shows remarkable resilience despite challenging economic conditions. The Selic benchmark interest rate reached 14.75% in May 2025, its highest level in nearly 20 years.

This rate climbed steadily from 10.75% in March 2024 to 14.25% by March 2025. CBIC President Renato Correia emphasized that Brazilians continue investing in housing despite expensive credit.

The desire for homeownership remains a powerful market driver according to Celso Petrucci, chief economist at Secovi-SP and CBIC advisor.

The federal government expanded the “Minha Casa, Minha Vida” program in 2025 to include families earning up to R$12,000 monthly. These households now qualify for financing with a 10% annual interest rate.

The government plans to inject R$15 billion from the Pre-Salt Social Fund into the program. Major developers benefit from this market strength. Cyrela Brazil Realty reported a 34% increase in first-quarter sales compared to 2024, reaching R$2.1 billion.

The company launched 18 projects during this period, doubling their previous year’s output. Supply constraints present a growing challenge for the sector.

New residential launches dropped 28.2% compared to the previous quarter. CBIC estimates current inventory would satisfy demand for only eight months without new projects.

The construction confidence index fell to 93.6 points in April, its lowest since March 2022. Despite this declining confidence, analysts still project 2.8% growth for the construction sector in 2025.

Labor shortages compound these challenges. Over 71% of construction firms report difficulty finding skilled workers, slowing project delivery and increasing costs. The National Construction Cost Index rose 6.85% over the past year.

Real estate financing shows mixed trends. ABECIP forecasts a 10% overall decline in 2025, with SBPE-funded mortgages expected to drop 17%. However, FGTS-backed credit should grow by 1% to R$126.8 billion.