New model for real estate foundry? Understand what is being discussed

The news that the government is studying alternatives for a new foundation model for real estate credit has generated a strong debate in the sector. The main idea is to reduce the dependence on savings deposits, bringing more resources from market fundraising. That is, there is a desire to put more money available for the expansion of the sector. But this goal needs to overcome the cost challenge of this credit.

The discussion is not new, but it gained breath last week. On Tuesday (22), Central Bank President Gabriel Galipolo said in the Commission on Economic Affairs (CAE) that Brazil will need to migrate to a new model of real estate funding model approaching market capture, reducing dependence on savings resources.

The next day, Finance Minister Fernando Haddad said in an interview with CNN that the federal government “still owes” a solution to the real estate credit market.

“Brazil does not have a good secondary real estate credit, everything is in the bank balance and the bank cannot clean the balance to leverage savings for this credit. We are studying this. It is a last stage of this government that has to be fulfilled,” said Haddad.

Officially, however, there is no ready proposal. To the InfomoneyBC’s director of regulation, Gilneu Vivan, said the discussions are underway with class associations and financial institutions that work in real estate credit to evaluate new forms and make adjustments. “The Central Bank is discussing alternatives and receiving suggestions. When a viable hypothesis arises, we can move forward,” he said.

According to Vivan, the central point of conversations is how the alternative will affect the cost of real estate credit. “The concrete question is that when you look at the amount of credit savings have already been overcome, and it begins to restrict new transactions. And the savings balance is stable and is safe that it will exist throughout the contract (financing). Other Fundings have other types of risk. LCI, for example, has a variation of supply price, affects the risk to take over.”

The theme is complex and the Infomoney Heard an important actor in the industry to understand the stage of conversations:

What is the real estate foundation

Real Estate Funding is a resource raising system that allows you to finance industry investments. Among them is part of the savings resources. But in recent years, the proportion of these resources that come from savings is falling. This is because fewer and less Brazilians are keeping the money in this investment due to low profitability and interest rates, Selic.

Until February this year, the Funding was composed at 31% for savings resources and showing a constant drop. In February 2024, savings raised 33% of funds and, in February 2023, were 38%. But this proportion has become 70%, recalls Sandro Gama, president of Abecip.

Other Funding uptakes come from FGTS, which in February this year was 26%, and the remainder came from the capital market: that month, there were 18% of Real Estate Credit letters (LCIs), 11% Real Estate Investment Fund (FII), 9% Certificate of Real Estate Receivables (CRIS), and 5% GUARANTEE REAL ESTATE (LIG). The numbers are part of the most recent survey released by the Brazilian Association of Real Estate Credit and Savings (ABECIP) Credit Entities.

“Savings deposits have been decreasing a lot and, on the other hand, the real estate market is growing. The capital market has become more relevant in the founding structure and has supported this growth, but it is necessary to think of new solutions,” argues Gama. “We are facing a funding that is running out.”

Also read: Real estate credit jumps 25% and reaches a record of R $ 312 billion in 2024

What are the alternatives?

For Gama, there will be no single solution that can serve the real estate market. The president of ABECIP bets on a segregation of operations.

Among the possible solutions is directing savings resources to long cycle operations, which are the real estate financing of individuals. The shortest cycle operations, aimed at builders and developers, would be restricted to the capital market. “This has been happening and could intensify even more,” he says.

Gama also argues to change the rules of Real Estate Credit Letters (LCIs), to return the liquidity of three months to roles. This liquidity was changed to a year of one year and then revised for 9 months. “LCI has supported the absence of savings over the past three years and has allowed the market growth. But what was important and was helping has been harmed with the change. The proposal is to reduce LCI’s liquidity and return to a period of 3 months,” he says.

Another source of the capital market for the real estate foundation that has been gaining strength is the Real Estate Receivable Certificates (CRIS). A S&P Global Ratings report on the sector states that changes to the rules for these roles, which expand the possibility of emission, had a positive effect on Funding. The trend, according to S&P, is that companies in the sector “continue to seek diversification from sources of resource, combining capital market instruments with traditional credit lines.”