The market is running time
How will the changes in the legislation on shared construction affect apartment prices?
One of the main issues discussed in connection with the changes in the legislation on shared construction is the price per square meter. The principled position of the authorities is known: the new version of 214-FZ is designed to protect the interests of home buyers and shift risks to professional market participants. However, the price of housing can be increased by housing prices, developers say. This and other problems were discussed at the recent round table in Moscow “Development under the new rules.”
Market participants agree that recent amendments to the legislation will radically change the rules of housing construction in Russia. And not all innovations are popular with developers. Many of them are afraid that banks will now play a too big role in the market, and replacing free co-investors’ money with expensive bank loans will lead to higher prices. So, according to the president of GK “Osnova” Alexander Ruchyev, in the next two or three years you can expect a significant increase in prices for new buildings. “Prices will increase – this is a fact, the developer will lay the whole load on equity in the final price of housing and in reducing supply,” said Ruchiev. “I think that 30-40% in the next 2-3 years is the indicator of the price growth, to which we will leave.” With such an assessment, the Strategic Development Director of FGC “Leader” Pavel Bryzgalov agreed. According to him, the price increase could have been greater, if not for the demand constraints. “Further growth (prices) will limit the low purchasing power of the population,” he explained. “There are no prerequisites for its growth, so developers will have to look for internal resources to improve business models.”
During the “round table” business representatives expressed a common opinion – the real estate market will be difficult to pass to new rules, and the reduction in the volume of housing construction is inevitable. Developers see the way out of the situation as “optimization” of the processes of managing the construction process, which can lead to staff cuts and changes in the “production structure”, for example, skewing towards panel houses that are built much faster than their monolithic counterparts.
For their part, the authorities are confident that changes in the market will not be critical. According to their logic, there are many components in the housing price that can be managed: this is the cost of building materials, and the payment for connection to the communal infrastructure, and compliance with the rules of land use and development. And, consequently, changes in the law should not directly affect the price of apartments. Moves in the construction industry associated with the transition to project financing will certainly affect the situation, but will not bring down the market. Head of the Department for the Development of New Territories of Moscow Vladimir Zhidkin, who participated in the discussion, believes that the rise in prices for housing under construction in the foreseeable future will not be as dramatic as business representatives think. “Prospective buyers simply do not have the opportunity to withstand a price increase of 20-30%,” he said. – At such prices, no one can buy. Growth, according to our estimates, is possible, but only in the corridor of 10%, a maximum of 15%. ”
Recently a similar point of view was expressed by the head of the capital’s construction complex Marat Khusnullin. “Certain difficulties due to innovations, of course, will be, but they are surmountable,” he said. – No one is going to curtail their activity in the market, the more so, the potential of possible projects is big. So we do not predict the collapse of the market. ”
The head of Moskomstroiinvest, Konstantin Timofeev, commenting on the situation, recalled that in recent years a significant reserve for housing construction was created according to the old rules. “According to our estimates, in the next year or two sharp fluctuations in house prices due to new rules of shared construction should not be expected,” – said Timofeev.
During the discussion, representatives of the construction business noted that today many large banks, of those that are able to finance the construction, have their own subsidiaries or affiliated construction companies. In this regard, some developers are afraid that these structures will enjoy the most favored nation treatment and will have access to bank lending to the detriment of competitors. Unaffiliated with banks of developers waiting, according to some experts, difficult times.
Source: “Stroitelnaya Gazeta”