January 18, 2017 / 12:00 PM / a year ago

Brazil housing starts jump 76 percent in November -report

SAO PAULO, Jan 18 (Reuters) - Brazil’s housing starts rose sharply in November in a sign that homebuilders are bullish on the prospects of the country’s economy emerging from its worse recession on record, a real estate research report showed on Wednesday.

The widely followed Abrainc-Fipe index showed a 76.1 percent jump in new home construction projects started in November, compared with the same month in 2015. In October, housing starts rose almost 26 percent against the year-earlier month.

Home sales rose 10.1 percent to about 10,100 units for the month, university research center Fipe and real estate developers association Abrainc said in a joint statement.

The so-called VSO indicator, which gauges sales as a share of total units available for purchase, slipped 0.2 percentage point to 7.9 percent, indicating available inventory would cover 12.6 months’ worth of demand, according to the report.

Sales cancellations, which have been weighing on homebuilder earnings this year, fell 20.2 percent from a year earlier, a positive sign for an industry hurt by tight credit and high interest rates. According to the report, 3,200 home sales contracts were canceled in November.

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. (Reporting by Ana Mano; Editing by Dan Grebler)

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