Oct. 5 (Bloomberg) -- The Bovespa Real Estate Index rose the most in three weeks as homebuilders led by Brookfield Incorporacoes SA rallied after Brazil cut interest rates for mortgages tied to a government housing program.
Brookfield surged 4.3 percent to 3.61 reais at the close of trading in Sao Paulo as the index advanced 1.9 percent. Cyrela Brazil Realty SA Empreendimentos & Participacoes, Brazil’s biggest homebuilder by revenue, rose 4.3 percent to 18.10 reais, the biggest one-day advance since Aug. 6.
Brazil lowered the interest rate in its housing program known as Minha Casa Minha Vida to 7.16 percent from 8.16 percent, Labor Minister Carlos Brizola Neto told reporters in Brasilia yesterday. The maximum price for homes purchased under the program was also raised to 170,000 reais ($84,000) from 150,000 reais in cities with populations above 1 million.
“This increases the price ceiling and the number of people that can participate in the program,” Erick Scott Hood, an analyst at brokerage SLW Corretora, said in a telephone interview from Sao Paulo. “It’s very positive for companies that have business in this segment as it could increase demand.”
MRV Engenharia & Participacoes SA, Cyrela and Gafisa SA are poised to benefit the most from the change because of their business serving low-income clients, he said.
MRV rose 2.8 percent to 12.59 reais, the highest in six months. Gafisa gained 2.9 percent to 3.90 reais.
The Bovespa Real Estate Index, which tracks 18 companies, rose 24 percent this year. The benchmark Bovespa index gained 3.2 percent.
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