Far from the luxury that characterizes São Paulo's most expensive skyscrapers, a change of course is beginning to appear on the construction sites of the country's largest city. Medium and high-end developers have started looking to the Minha Casa Minha Vida (MCMV) program as a way to compensate for the slowdown in their traditional market.
Among listed developers traditionally associated with medium and high-end properties, the movement is appearing at different stages. While Cyrela, Lavvi, and Trisul are expanding their exposure to the Minha Casa Minha Vida program, Eztec launched a project within the program in partnership with Cury in the first quarter. And Mitre is preparing its entry into the segment.
To avoid diluting the image of their main brands among high-income consumers, the strategy adopted by construction and real estate development companies was to create exclusive brands and business units. An example is Cyrela, with its Vivaz brand, whose share of the group's launches jumped from 10% in 2023 to 29% in 2025.
"More than a migration between segments, we see an increasingly diversified market, in which companies with complementary brands and adaptability tend to be better prepared to serve different customer profiles and different economic cycles," says Felipe Cunha, director of incorporation and innovation at Vivaz and Living, from Cyrela.
The transition, however, imposed operational challenges. The main obstacle is profit margins, which in the affordable housing segment are around 20% to 25%, well below the 30% to 35% practiced in the high-end segment – in addition to the need to adapt projects, reduce square footage, and compete for land in a heated and competitive market.
“The slowdown in the middle and upper income segments is real. The numbers leave little room for a very constructive narrative,” says Igor Fernandes, equity analyst at AZ Quest, regarding the middle and upper income sector.
The picture of this turning point appears in the most recent data from Secovi-SP. In April 2025, properties outside the Minha Casa Minha Vida program accounted for 52% of units launched in the city of São Paulo. A year later, that share fell to 25%, while launches within the MCMV program jumped to 75%.
Sales outside the Minha Casa Minha Vida program declined. In April, other segments sold 3,016 units, a 24.3% drop compared to the 3,985 units sold in the same month of 2025. In the MCMV program, however, sales rose 23.3%, from 5,330 to 6,572 units.
The VSO, an indicator that measures sales in relation to available supply, fell from 11.8% to 7.3% for properties outside the program. In the MCMV program, the indicator decreased from 13.7% to 12.1%, remaining above other segments.
With the market tighter in the high and middle-income segment, Rodrigo Cagali, CFO of Mitre, classifies entering the MCMV (Minha Casa Minha Vida) program as "risk management." "There is a gigantic housing deficit and resilient demand, due to government-subsidized financing, while interest rates have a significant impact on our high and middle-income segment."
But just as low-income companies face difficulties when trying to upgrade, mid- to high-end developers need to adapt their product, cost, engineering, sales, and funding to compete in a market with lower margins and greater scale.
To gain traction and reduce risks in a still unexplored market, Mitre will undertake MCMV projects in partnership with a company already operating in the segment, which will be responsible for construction. The terms of revenue sharing are still to be defined, but Cagali expects Mitre to retain less than 50%, given that it will only contribute the land to the operation.
"We already had land that fit into the new tier 4 of the MCMV program, but it was difficult to make the numbers work for the middle-income housing project. That's when we started studying the program," says Cagali.
According to him, the plan is to launch R$ 1 billion in VGV (Gross Sales Value) in the MCMV (Minha Casa Minha Vida) program next year. "We already have R$ 500 million in VGV, which are two plots of land that will start the partnership. The idea is to secure another R$ 500 million by the end of the year so that, starting next year, we can achieve a recurring rate of launching R$ 1 billion in VGV per year in low-income housing."
High interest rates and prices at their peak.
The Eztec case well illustrates the complexity and the ups and downs of this foray into the MCMV program. Initially, the developer tried to operate in the program under the Fitcasa brand, but ended up abandoning the operation due to excessively tight margins (for a long time it was the only major player in the sector to back down).
The company, however, reassessed its strategic position and, in 2024, returned to the MCMV program through partnerships with specialist companies in the sector, such as Cury and Conx. More recently, in March 2026, Eztec announced plans to resume its own launches, with a first project estimated at R$ 200 million.
CEO Silvio Ernesto Zarzur said that "the 'Minha Casa Minha Vida' program is a thriving market, and a company of our size cannot afford to be left out."
Daniel Utsch, manager at Nero Capital, believes that the worsening outlook for interest rate cuts has changed the scenario, especially for middle-income earners. "Middle-income earners were beginning a recovery, with the prospect of falling interest rates. But this worsening of the monetary policy cycle has thrown a bucket of cold water on that thesis," he states.
In the high and very high income brackets, the dynamics are different with regard to interest rates, but selectivity has increased after the strong appreciation in recent years. "Perhaps now we have reached a price limit that may be scaring away some demand."
According to FipeZAP, the average advertised price in São Paulo rose 15.9% between May 2023 and May of this year. In neighborhoods that concentrate higher-income developments, the increase was even greater. In some cases, such as Jardins, Itaim Bibi, and Paraíso, prices rose 21%, 18.4%, and 18.2%, respectively.
More recently, however, the pace has lost momentum. In São Paulo, the accumulated 12-month increase in the price per square meter slowed from 5.64% in May 2025 to 4.23% in May 2026. In Itaim Bibi, the variation fell from 9.8% to 3.2%; in Pinheiros, from 5.5% to 1.8%; and in Vila Mariana, from 8.6% to 0.7%.
“Some projects ended up reaching the top, the price ceiling,” says Ricardo Rinaldi, head of new business at Paladin. According to him, this raises doubts about the ability of these properties to continue appreciating above inflation. “Everyone does the math. Just because you're selling to the very high-end market doesn't mean the buyer will pay any price.”
In the ultra-high-end segment, some developers bet that the scarcity of land and truly unique properties would sustain increasingly higher prices. However, in some neighborhoods, the supply grew more than expected, reducing the sense of exclusivity that helped justify these prices.
“They bet on a shortage that didn’t necessarily happen,” says Rinaldi. “So that this doesn’t end up turning into a very large stock in the market, you’re going to have a reduction in this price list.”
According to data from Secovi-SP, this pressure is reflected in the value of properties sitting idle in inventory. In April, properties outside the Minha Casa Minha Vida program totaled R$ 50.3 billion in available value for sale in the city of São Paulo, an increase of almost 40% compared to the R$ 36 billion recorded in the same month of 2025.
End of an era?
“This increase in inventory raises a yellow flag for those players who are often more leveraged or have a slightly larger inventory than the market average,” says Caio Araújo, an analyst at Empiricus.
Utsch, from Nero Capital, points out that, although this is not a structural emptying of the middle and upper income brackets, there is a change in cycle after the boom of recent years. "Cycles are long. When supply gets it wrong and there's an excess, it can take three, four, five years or even longer for that digestion to happen," he states.
With the Selic rate rising, more expensive square meters, and more restricted funding , Vilmar Carreiro Filho, a real estate credit restructuring lawyer at Stocche Forbes, believes that traditional developers will have to reassess their size, pace of operation, and target markets to navigate the new cycle.
"Real estate developers, if they aren't already, need to rethink their business models while there's still room to adapt their operations without having to resort to bankruptcy protection. Survival doesn't seem easy."
On the stock exchange, this new cycle has not yet translated into a widespread correction in the sector's stocks. The IMOB, B3's real estate index, has accumulated a slight drop of 0.82% this year, while the Ibovespa has risen 5.4% . But, behind the index's almost stable performance, investors have begun to pay closer attention to two points: the level of inventory and the leverage of real estate developers.
This is where the difference between the companies starts to become apparent. At Helbor, one of the developers most exposed to the medium and high-end market in São Paulo, gross sales fell 32.1% in the first quarter, to R$ 420 million, while the company's inventory rose 41% compared to the same period in 2025, reaching R$ 1.87 billion.
On the other hand, Cyrela has consolidated its position in the MCMV program through Vivaz, its brand focused on low-income housing, and has been seen by the market as one of the best-positioned companies to navigate this cycle. In the first quarter, the Vivaz/MCMV line accounted for R$ 1.4 billion in contracted sales, almost half of the company's total for the period.
“Looking at operational performance in São Paulo, Cyrela continues to stand out positively, given the level of profitability it has had in past projects and its increased participation in the Minha Casa Minha Vida program,” says Araújo, from Empiricus.
Cunha, brand director at Cyrela, states that the move does not represent a change of course, but the continuation of a strategy. The demand for housing, he says, is structural. "Cycles change, but the need to live well remains."
However, the migration is not just defensive. For Fernandes, from AZ Quest, the MCMV (Minha Casa Minha Vida) program has also become a growth avenue for developers who previously viewed the segment from the outside.
The combination of deeper demand, funding via Caixa and FGTS, subsidies, and greater predictability in disbursement, he points out, has made the business more profitable and less dependent on high-income buyers.
“It’s opportunism because the business is very good,” he states. At the same time, he says, joining the program serves as protection during a period of slower growth in the medium and high-end markets.
