IHA Secretariat JOSÉ CARLOS MARTINS PRESIDENT OF CBIC

2 ABOUT US Headquartered in Brasilia, Brazil, the Brazilian Chamber of the Construction Industry (CBIC) is made up of 81 unions and employer associations in the construction industry from all 26 Brazilian states and the Federal District. Membership in CBIC is voluntary, and the entity serves as the industry’s representative body at the international level. The Chamber is a member of the Inter-American Federation of the Construction Industry (FIIC), an affiliate of the Confederation of International Contractors’ Associations (CICA).

3 THE BRAZILIAN ECONOMY Source: Brazilian Institute of Geography and Statistics (IBGE), Annual Social Information Report (RAIS)/Ministry of Labor and Employment (MTE), Brazilian Central Bank Note: Exchange Rate R$ = US$ 0,4247 (average in 2014); Minimum Monthly Salary – 2016 Exchange Rate R$ = US$ 0,2474 (January 2016 ) Note: Exchange Rate 2014 Average; Prepared by: CBIC

4 GDP vs. INFLATION Source: Brazilian Institute of Geography and Statistics (IBGE) – Brazilian National System of Accounts. * Results computed based on Quarterly National Accounts (Contas Nacionais Trimestrais). **Brazilian Central Bank Projections. Prepared by: CBIC.

POLITICAL AND ECONOMIC CHALLENGES 5  Political Disputes  Unstable Administration  Anti-Corruption Operations  Low Investment  High Inflation

HOUSING OVERVIEW 6 Source: João Pinheiro Foundation (FJP), Statistics and Information Center (CEI). Prepared by: CBIC In 2014, a total of 1.8 million new families were formed (PNAD 2014)

PROFILE OF COMPANIES 7 Source: Annual Social Information Report (RAIS) 2014 – Ministry of Labor and Employment (MTE) Prepared by: CBIC. Note: Based on new National Classification of Economic Activities (CNAE) 2.0/Brazilian Institute of Geography and Statistics (IBGE).

REAL-ESTATE FINANCING 8 Source and Prepared by: CBIC. Note: Exchange Rate R$ = US$ 0,2998 (average in 2015)

FGTS 9  Mandatory deposit by companies into specific account for individual employees equal to 8% of monthly salary  Principal means of withdrawal:  Dismissal without cause  Retirement  Purchase of own home  Investments in fund are for real-estate credits (up to 10 minimum monthly salaries) and urban development  Total assets on 11/30/15:  U$ billion Source: Federal Savings Bank (Caixa Econômica Federal) – FGTS Channel Note: Minimum Monthly Salary in 2016 = US$ 264 (Exchange Rate R$ = US$ ) Prepared by: CBIC

SAVINGS ACCOUNTS 10  Most common investment in Brazil ( 6% )  Financing for properties up to U$224,800  Total Assets: US$ billion  In 2015, savings accounts lost US$ 16.1 billion – due to high basic interest rates Source: Brazilian Central Bank Note: Exchange Rate R$ = US$ 0,2998 (average in 2015) Prepared by: CBIC

CHARACTERISTICS OF REAL-ESTATE FINANCING 11  Means of amortization – Constant Amortization System (SAC)  LTV – 62 % ( 2015 )  Default – 1.9% ( 2015 )  + 90 % financing for own use  Fixed interest over the contract  9,6 % real estate credit / gdp

CONSTANT AMORTIZATION AND FRENCH SYSTEM 12 Prepared by: CBIC

REAL ESTATE FINANCING 13 Source: Federal Savings Bank (CEF) – FGTS Channel, Brazilian Central Bank; Brazilian Association of Real-Estate Credit and Savings Entities (ABECIP), Integrated Financial Administration System (SIAFI)/Secretariat of the National Treasury (STN), Budget Consulting and Advisory Office of the Brazilian Chamber of Deputies. Prepared by: CBIC Note: OGU = amounts earmarked in subsidy and transfer actions. Exchange Rate R$ = US$ 0,2998 (average in 2015) In 2015 amounts, adjusted for inflation (IPCA)

FUNDED UNITS 14 ANNUAL PRODUCTION OF HOUSES - 1,87 MIllion Source: Brazilian Central Bank; Brazilian Association of Real-Estate Credit and Savings Entities (ABECIP), Federal Savings Bank Prepared by: CBIC

CURRENT REAL ESTATE MARKET 15  Negative Points:  Unemployment  High market interest rates  Shortage of financial resources  Banking concentration  Positive points:  My House My Life Program  Legislation – greater guarantees for investors/lenders  High deficit  Social Mobility  Cultural change

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