New regulations will be introduced by the Government in the context of the revamped “My House My Life” (MCMV) program.
The MCMV has always been an important source of revenue for companies operating in this sector, but it lost momentum in previous governments.
However, executives from MRV, Direcional, and Tenda have shown great optimism about the new model that will be presented.
Rafael Menin, co-CEO of MRV, has high expectations, as increased subsidies will boost the company’s operational performance, which has been struggling to recover lost results since 2021.
MRMV: Expanding Margins
In a document, Santander bank stated that the government has recently selected new members for the FGTS, which will further accelerate the presentation of new proposals by the Ministry of Cities, thus improving the accessible criteria of MRMV.
The package of measures will be voted on in another court meeting, probably on 07/06, and could “potentially boost sales compared to supply or also bring the companies’ gross numbers closer to pre-pandemic numbers.”
An even greater increase in the number of families served by “My House My Life” is expected, who earn up to R$ 2,600 per month, resulting in an increase in subsidies.
Decision Granted by (STF)
There is concern in the sector due to a possible change in the FGTS, which could affect the housing contracts established within the program, whose discussion is ongoing in the (STF).
This has been a real problem for the package’s presentation.
According to Direcional’s CEO, Ricardo Gontijo, a change in the correction of the readjustment would have a significant impact on low-income people in “My House My Life.“
Bruno Mendonça, Pedro Lobato, and Herman Lee, analysts at Bradesco, expressed their opinion in a meeting last week.
“Even with the doubts related to the STF, we view very favorably the system where the government continues to discuss program improvement through other proposals and forms.”
They also conclude that the so-called Group 1 of MRMV needs to be a government priority on the housing agenda, even if it is not the main focus of affordable capital companies.
Symmetry Between Government Plan and Other Sectors
The government’s move to revitalize one of its most emblematic initiatives, mainly present during the second term of the current president Lula, can significantly facilitate the program’s ideas. “The government is in tune with the same ideas as the sectors.”
“The latest information indicates that the government, regardless of the suspended decision in the STF, intends to maintain the measures it is devising for the My House My Life program,” he said in a conference with other analysts.
According to CEO Rodrigo Osmo, the government is fully committed to the program through the FGTS, where resources are the main financiers, along with housing savings, in Brazil.
“The federal government’s responsibility for the program is significant,” Rodrigo emphasizes. “The ‘MRMV’ program is considered a priority and undoubtedly ranks among the government’s top social priorities over the next four years.”
Rodrigo states that the government will seek a “solution before the Supreme Federal Court.” And even if that is unlikely, he believes there will be a government willingness regarding the previous ideas of the My House My Life program.
Cost Stability
Another positive aspect for builders concerns costs, which have remained stable despite companies’ concerns about high inflation in prices of key and larger materials needed for construction.
This becomes even more relevant when it comes to works with lower expenses due to narrower margins in this segment.
“We observed in previous months, when analyzing INCC, that labor costs are increasing more than construction materials,” Ricardo stated.
“This did not happen during the pandemic when materials increased with even higher values than labor,” he compares, highlighting the current more favorable moment.