building real estate market indices for the brazilian market

BUILDING REAL ESTATE MARKET INDEXES FOR THE

BRAZILIAN MARKET

Who isZAP?

Who isFipe?

Brazil: numbers, historical

facts andreal estate

market

FipeZAPpartnership:

products andindexes

Repercussions in the media

Who isFipe?

Brazil: numbers, historical

facts andreal estate

market

FipeZAPpartnership:

products andindexes

Repercussions in the media

Who isZAP?

Launched2007

ZAP T IMEL INE 140x more listings1000x more audience than the newspapers

2010

100% owned by Grupo Globo –The largest media group in Latin America70% of TV audience market share

2012

Approximately400 employees27 offices in all of Brazil

TODAY

ZAP T IMEL INE Sponsors Formula 1Top of Mind in classified ads40.1% revenue growth

2015

ZAP 50% larger than the competitionAcquisitions:

2014

ZAP IN NUMBERS2015 VS 2014

Source: Internal database

VISITS

116mi36%

SEARCHES LISTINGS

AD IMPRESSIONS LEADS TRANSACTIONS

412Mi76%

1.1Mi139%

13Bi180%

8.4Mi61%

169.7K61%

2015

Who isZAP?

Brazil: numbers, historicalfacts and

real estatemarket

FipeZAPpartnership: products and

indexes

Repercussionsin the media

Who isFipe?

Indexes

Expertise

Indicators

F I P EINSTITUTE OF ECONOMIC RESEARCH FOUNDATION

ConsumersPublic SectorReal Estate Market

Academic ProgramsAd-Hoc ProjectsResearchesEconomic and Financial Indicators

Indicator for DevelopersIndicator for Auto MarketSalary-meterIndicator for Job Market

WHY DOES THE P A S T M A TTE R ?

1890 1910 1930 1950 1970 1990 2010

+ 60

+ 200

+ 80

+ 100

+ 120

+ 140

+ 160

+ 180

HOME PRICES IN THE USA

In 2005, the Nobel Prize Winner Robert

Shiller foresaw and demonstrated the

evolution of real estate prices in USA

’

HOW ABOUT BRAZIL?

Necessity to create an index of historical pricing

High volatility in the political and economic environments

Historical data is rare

Who isZAP?

Who isFipe?


indexes



real estatemarket

Largest economy in South Americaand Latin American region (40% share)

USD 11.38kin 2014

GDP per capita:

GDP:USD 2.39trillion in 2014

Population:205 million

2nd largest economy in the Western Hemisphere

Size 3,286,488

square miles

World’s 7thlargest economy

Total homes50 million

BRAZIL IN NUMBERS

1964Beginning of the military dictatorship

Until 1964Market totally deregulated

1967New Currency:Cruzeiro

1964Establishment of the Housing Finance System

1970New Currency:Cruzeiro Novo

1966Creation of theNational Housing Bank

1964 1970MAIN FACTS

IN BRAZILDictatorship Regime

IN THE REALESTATE MARKET

Time for structuring

1975Expansion of the middle class + Consumption = inflation

Low resources for the real estate financing

1976Impact of the International oil crisis

1971 1976MAIN FACTS

IN BRAZILEconomic Growth


Housing ShortageAccumulated Units(Total)

6.000.0005.000.0004.000.0003.000.000

2.000.0001.000.0000 1970 1974 19781972 1976 1980

Evolution of the numberof financed homes (Units)

1980Accumulated inflation(110% a.a in 1980)

Banks restrict new credits

1977 1982MAIN FACTS

IN BRAZIL End of theeconomic miracle


Delinquency as high as a skyscraper

GPD Evolution1950 to 1987

15

1311

9

753

1-1-3

-5

1951 1957 1963 1969 1975 1981 1987

Economic Miracle

“Lost Decade”

Real Estate Developers take on the role of financiers

1984Social movement wanting democracy

Big unemployment rate

1983 1990MAIN FACTS

IN BRAZILEnd of the dictatorship


Delinquency still growing

Stratospheric delinquency

Delinquency SFH rate evolution compared tototal financings (1980 – 1984)

20,0%

10,0%

0,0%

60,0%

40,0%

30,0%

50,0%

1980 1981 1982 1983 1984

54,6%

Total

1985GDP growth reaches 7.8%

1986New presidentand new currency: Cruzado

1989New currency: Cruzado Novo

Accumulated inflation: 1.035%

1990The first president electedby the brazilians

New loan offers slowed down

1992President Collor was impeached

Blockage of financial assetsand 60% of savings accounts

1994New currency: Real The most successful economic plan until nowadays

The lowest amount of financed houses since 1965

End of high inflation4th World Soccer Cup Title

1991 1995MAIN FACTS

IN BRAZILA new chance for Brazil


Stagnation

1996Monitary Policy Committee was established

1997Establishment of the Real Estate Financing System

1999Implementation of inflationtargeting in 1999 by Brazilian Central Bank

2000300 times more houses financed compared to 1994

1996 2000MAIN FACTS

IN BRAZILInflation under control


New housing policy

2002Record growth of formal jobsLaunched the largest income distribution program: Bolsa Família

2001 2005MAIN FACTS

IN BRAZIL Rise of the family consumption


A new era in real estate financing

2001IPO of the 14 main construction companies

200245.6 thousand units launched in the city of São Paulo - historical peak for launch and sale

Reduction of interest rates Increase in financing terms and percentagesNew classified portals on the market

2007Brazilian GDP grows 6% yoy, best performance since 1986

2006 2011MAIN FACTS

IN BRAZILBrazil takes off


Real estate boom

2007Creation of ZAP portal

2009Minha Casa Minha Vida:the largest federal housing program for low income families

2010Economy grows 7,5%

2010Number of financed houses doubled

2011Launch of FipeZAP index

2012Economy has a weak performanceOnly 0,9% growth

2012 2015MAIN FACTS

IN BRAZIL Fall, recessionand pessimism


Cooling off period

Decline of home prices Increase in interest rate in leasesRecord number of cancellations up to 41% over total sales of new homesHuge offer of new propertiesConstruction companies deep in debt

2014Dilma Rousseff isreelected president

2015Decrease of loan-to-valuefor pre-owned property financing from 80% to 50%

2015GDP estimatedby The International Monetary Fund: recession of -3,8%

Who isZAP?

Who isFipe?


real estatemarket



indexes

-

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

Jun-

65Ju

n-66

Jun-

67Ju

n-68

Jun-

69Ju

n-70

Jun-

71Ju

n-72

Jun-

73Ju

n-74

Jun-

75Ju

n-76

Jun-

77Ju

n-78

Jun-

79Ju

n-80

Jun-

81Ju

n-82

Jun-

83Ju

n-84

Jun-

85Ju

n-86

Jun-

87Ju

n-88

Jun-

89Ju

n-90

Jun-

91Ju

n-92

Jun-

93Ju

n-94

Jun-

95Ju

n-96

Jun-

97Ju

n-98

Jun-

99Ju

n-00

Jun-

01Ju

n-02

Jun-

03Ju

n-04

Jun-

05Ju

n-06

Jun-

07Ju

n-08

Jun-

09Ju

n-10

Jun-

11Ju

n-12

Jun-

13Ju

n-14

Jun-

15

BRL USD Total formal income

F IPEZAPMAIN HOME PRICE INDEX FOR BRAZILIAN REAL ESTATE MARKET

Both movements seem to have been triggered

by changes in regulation, which

increased credit supply

Recent boom (and decline in prices)

was accompanied by a sharp growth in

total income

Prices in USD are at the same level as

the late 1970’s

The 2005-2014 boom was similar to the 1965-

1979: In the 1960’s & 1970’s boom prices

were up by 108% (real terms); in 2000’s the increase was 166%

80.60%

64.50%

64.30%

62.10%

59.90%

43.80%

35.20%

23.20%

22.00%

18.90%

14.50%

9.80%

9.70%

7.00%

3.80%

1.50%

UK - 2013

Canada - 2011

Portugal 2013

USA - 2013

Spain - 2013

France - 2013

Germany - 2013

Italy - 2013

South Africa - 2013

Chile - 2012

China - 2012

Mexico - 2013

Brazil - 2014-11

India - 2011

Russia - 2013

Argentina - 2012

(%) Mortgage Loans as of GDP

Source: Abecip

Growth of real estate pricesin Brazil was very fast for international standards

The current economic scenarioand the enormous volatility seenover the last 30 years createadditional short-term risks

Over the long term, theredoesn’t seem to be anyabnormal behavior

Potential for development andexpansion of real estate credit

LESSONS LEARNED

PARTNERSHIP

F IPEZAPTWO FORCES

C OMBINED TO PR OVIDEKNOWLEDGE

Calculated based on property ads published

on ZAP portal

Average price per m² ofready to move properties

in 20 Brazilian cities

First indicator with a nationalscope that monitors home prices for sale and rental in Brazil

Real estate market statistics by area and type of property

WITH FIPE

FIPEZAP PRODUCTS

FIPEZAP INDEXES FORS A L E A N D R E N TA L

Main indexes of the real estate market that monitor the evolution of home prices for sale and rental

X-RAY RESEARCHSURVEY WITH OVER 2.000 RESPONDENTS SEEKS TO IDENTIFY Buyer profile

Purchase objectives

Discounts praticed

Price expectation

B U Y O R R E N T CALCULATOR

Widget that allows users to compare purchasing options from their economic/finance point of view

FIPEZAPBULLET I N

Quarterly publication with an economic analysis focused on the real estate market outlook

It addresses macroeconomictopics, indicators and sector specific perspectives

FIPEZAP

Annual event that gathers the main leaders of the brazilian real estate market

Economic analysis

Market trends

PANEL

Who isZAP?

Who isFipe?


real estatemarket


indexes


FIPEZAPMEDIA IMPACT

Renamed national and international institutions rely on FipeZap information

MEDIA E X P O S U R E

https://www.youtube.com/watch?v=kc7eD_Grym0&feature=youtu.be

TWO UNITED FORCES FORM

A POWER

THAT ISTHE BEST

DEFINITION FOR FIPEZAP

QUESTIONS?

THANK YOU

BUILDING REAL ESTATE MARKET INDEXES FOR THE

BRAZILIAN MARKET

building real estate market indices for the brazilian market

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