Krasnodar, 13 December – Yug Times. Nikolai Kazansky, President of the Russian Guild of Managers and Developers, Colliers International Russia Managing Partner
“The year 2018 was rich in political and public events that in varying degrees affected the real estate market. The Presidential campaign served a catalyst for the modification of the Government which now is facing grandiose tasks of urban development set by the new Presidential decree.
“The challenges we must react to are 120 million square metres of housing to be commissioned annually, improvement of the comfort of urban environment, construction of modern sports, educational and cultural infrastructure throughout the country. “For nearly three decades, Russian developers have been in the vanguard of local development; they enrich our cities with high-quality residential and commercial estate, develop new formats and make themselves over to the demands of consumers of all real estate segments. Competition is growing, and the market has to promptly react to the changing conditions.
“This year became a watershed year for the residential building industry. Such factors as project financing, toughened control over the developers, and others will undoubtedly alter the market.
Cabinet’s Initiatives Bring No Optimism
Aleksandr Litovka, President of the Kuban Chamber of Real Estate
“From July 1, 2018, the use of escrow accounts is optional, but from July 1, 2019, it will be mandatory. The developers are feeling uneasy, for they will have to be waiting twice as long to get their profits, and they will also have to keep down their appetites – for it won’t be possible to shift their additional expenses on the customers, because their income continues to fall down.
“Speaking briefly, the Government’s latest initiatives brought no optimism to the developers at all. The new amendments, the scheduled increase of the VAT rate and of the retirement age will affect, either directly or indirectly, the real estate market.
“The enforcement of the new requirements to the developers will make small companies leave the market, to the favour of consolidation of larger players.
“Notwithstanding the rise in the developers’ expenditures due to the new rules, they will not raise their prices in the nearest future – most probably, they would have to sacrifice their margin.”
Investment Pools Remain Real
Roman Muradyan, Yuga-Build.ru Managing Partner:
“Presently, the Russian residential market continues to exist in conditions of transitional period to cardinal changes in the national housing legislation.
“Now the state will be much more controlling the construction activity, legalisation of deals with flats co-owners, and financial coverage of the construction of residential blocks.
“The buyers should be prepared to the price rise. It is easy to explain: banks’ involvement in construction projects would entail additional expenditures required to build their internal structure of work with developers. The latter would shift these new expenses on the customers by raising the flat prices.”
Arbitrary Classification of Offices Goes On
Vladimir Karasenko, Board Member and President of the Russian Guild of Realtors, Concordia Co. LLC CEO.
“There are very few first-class offices in Krasnodar. The business centres that were put into operation over five years ago as class A offices have ceased to comply with modern requirements.
“However, there is an acknowledged classification of business centres developed by the Russian Guild of Managers and Developers, the situation in Krasnodar remains the same: owners of the office blocks classify their premises at will, arbitrarily.
“This is caused by the illusions of the owner or the managing company – or by their longing to get a higher rental fee. It is obvious that this classification very often fails to reflect the real state of the premises.”
Price Rise to Continue
Andrei Shadrin, INCITY Director
“Mortgage rates are directly dependent upon the Central Bank’s key rate which has been changing during the year – and not always upwards. In practice, the banks’ rates may also vary upwards and downwards during the year. For instance, last year in the same period the banks’ rates were some 1.5% higher than now.
“The long-term forecast presupposes that prices for real estate will continue to grow. Nobody – neither sellers of new residential blocks nor owners of second-hand housings – would be able to avoid that. Bearing in mind that VAT will shortly be raised, the prices may also go up quite soon. At the same time, people will continue buying real estate.”
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