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- Construction of the century: developers in Russia allowed to postpone the start of housing
Construction of the century: developers in Russia allowed to postpone the start of housing
The authorities allowed developers to postpone the start-up of housing. This approach is implemented as an anti-crisis measure designed to help Russian developers to ensure the completion of real estate. The government does not see any serious risks in the implementation of the initiative. However, experts warn that postponing the deadline may undermine confidence in the market, increasing the discontent of shareholders. What is happening with the real estate market is in the Izvestia article.
Right shift
Developers may postpone the time of housing commissioning. The Russian authorities provided them with such an anti-crisis measure. This was announced by Deputy Prime Minister Marat Khusnullin at the plenary session "Technological Leadership in the construction industry". He does not see any serious risks in implementing this approach.
"Indeed, as an anti-crisis measure, we allowed developers to shift the deadline slightly to the right in order to build houses accurately and reliably. I won't say that we have any huge risks right now. We see in real time, we meet with all the governors once a week, we monitor what is happening in the construction market. There are individual cases, but we basically believe that we will survive this situation as a whole," Khusnullin stressed, commenting on the situation in the real estate market.
The Deputy Prime Minister expects that the situation of developers will improve if the key rate starts to decrease at a faster pace.
At the same time, builders in Russia are facing difficulties today. According to Khusnullin, the deadline for 19% of construction projects has already been postponed. 20% of developers are at risk of bankruptcy. And their share, according to the Deputy Prime Minister, may exceed 30% if Russians do not start investing more actively in real estate.
Izvestia sent a request to the Ministry of Construction of the Russian Federation. No response has been received at the time of publication.
A difficult situation
The Russian real estate market is facing crisis phenomena today, which are caused by several factors, said Adel Daryakin, Deputy Director of the Institute of Economics, Management and Law at the Moscow State Pedagogical University. First of all, high interest rates on credit resources have an impact on the situation.
"Despite the reduction of the key interest rate by 100 basis points a week ago, market mortgage lending still remains in a zone of limited demand," the expert points out. And this demand turned out to be limited due to the high cost of both real estate and credit products in banks.
At the same time, inflationary costs led to an increase in the cost of building materials, which determined an increase in the cost of construction, the Izvestia interlocutor clarifies.
Thus, the manifestation of the stagnation of the housing market determines low demand, high supply and limited sources of financing, he lists.
Currently, there is a weak recovery in the new building market caused by seasonal factors and signals from the Central Bank in the form of a slight reduction in the discount rate, says Maxim Fedorchenko, president of the Association of Construction Organizations of the Novosibirsk Region.
However, the cooling of the market continues at the moment, according to Andrey Tonkonogov, head of the real Estate Consulting practice at TeDo.
— As predicted earlier, the market is returning to the sales volumes that were before the introduction of preferential mortgages, — he is sure.
At the same time, many developers delay the deadline for issuing keys, the president of the International Academy of Mortgage and Real Estate Irina Radchenko draws attention. Almost every second construction site is in violation of deadlines.
— The decision that there will be no penalties for failure to deliver is still valid until the end of the year. But I think that this period will be extended later if the developers do not meet the deadlines," the Izvestia interlocutor expects.
An ambiguous path
The postponement of housing commissioning undermines confidence in the market, warns Adel Daryakin. This leads to an increase in discontent on the part of shareholders, as the effect of freezing their invested funds arises: the inability to move on time, the need to rent an apartment and pay the loan at the same time.
In addition, a "domino effect" may occur, when a shift in the timing of current facilities entails a postponement of the construction schedule for new or planned houses, the expert warns.
Customers will face inconveniences due to this measure, Irina Radchenko expects. And today, buyers of new buildings are mostly people who use preferential family mortgages. The developers themselves will benefit from the possibility of postponement, because they will be able to continue building facilities at the right pace without having to pay fines and penalties.
In the short term, the measure will help developers by providing a temporary lag to find liquid funds and cover cash gaps, confirms Daryakin.
— At the same time, if the developer does not have money and a good reputation, postponing the deadline can only create additional legal and financial risks, — emphasizes the interlocutor of Izvestia.
The shift in the timing of housing commissioning corresponds to the interests of both developers and shareholders, Maxim Fedorchenko does not agree.
— In order to maintain the stability of projects, developers are trying to bring the pace of construction in line with the pace of current sales. If you build faster than you sell, the funds collected on escrow accounts will no longer cover the loan spent on construction and installation work, which means a sharp increase in the loan rate," he explains.
This, according to the expert, may lead to a violation of the financial plan of the project — the expected revenues will become less than the expenditure part and the bank will stop financing.
— Therefore, with a stable pace of construction, some slowdown is reasonable, because it is important for shareholders to get housing in the end, and not to return the money from the bankrupt developer's escrow account, — the interlocutor of Izvestia is convinced.
Positive dynamics
For the developers themselves, it is much more profitable to deliver objects on time, Maxim Fedorchenko draws attention. But to do this, it is necessary to improve the sales situation, which decreased with an increase in the discount rate and the abolition of preferential mortgages.
— So they can be returned either by expanding preferential programs, or by making "ordinary" mortgage products available, — the expert is convinced.
To improve the situation in the real estate market, it is necessary to work out the problems of demand and financing of construction, confirms Adel Daryakin. The key rate and inflation remain the main indicators. With their mutual decrease, the real estate market may revive.
"But, according to the Central Bank's forecast, the rate will be less than 15% no earlier than the second half of 2026," Andrei Tonkonogov points out.
Targeted loans, government guarantees and financing instruments can also have an effect in reviving the market, Daryakin is sure.
Recently, however, the demand for real estate has been increasing, Irina Radchenko notes. According to her, this is caused by a reduction in the key rate and a weakening of the ruble.
— People have already moved out of deposits back to the real estate market. They are invested in both excavation and recycling. Therefore, demand is gradually returning now," the expert points out.
This may improve the situation in the real estate market in the future, because developers will have the means to finish the projects they have started as soon as possible, the Izvestia interlocutor believes.
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