Krasnodar, 19 March. On July 1, substantial restrictions in the construction sphere will be introduced in Sochi. The restrictions will apply to erection of high-rise blocks of flats, private dwellings and hotels. In social and business zones, the authorized use ‘Hotels’ will be expressed as ‘conditionally authorized.’
The authorities believe that this will help rigidly control the housing development in the city. In particular, it may help fight with erection of residential housing unfairly declared as ‘apartments.’
These restrictions for the construction of high-rise blocks will apply in Sochi until the new city development plan is approved – that is, for about two years. But even then, residential tower blocks may be erected only in the framework of the comprehensive development scheme. What is more, buildings will be erected mainly in the former production sites.
Our expert noted that the current situation forms housing shortage and creates the foundation for further rise in prices, especially at the background of the announced moratorium on construction of new buildings. If the prices would continue to rise for another 1.5 or two years, the new homes market may entirely disappear, while both the prices and the number of deals struck in the existing homes market (where the prices are currently much lower – about 150,000 roubles per square metre) would go up.
Sochi has never been and it will probably never be a city affordable for all holidaymakers. It will be affordable only for a certain category of them, which plays against the wide spectrum of consumers but is good for investors. When the players who may afford to enter the housing market in Sochi understand that the local price list tends to soar up which means that their business will also climb up in due course of time, they will start boldly investing in Sochi.
However, there exists a reverse side of the problem: any nonmarket restrictions cannot be unambiguously effective – in any case, they distort the situation. The currently introduced restrictions are the last choice that means that there were no other, softer means to put the things to order.
Artur Karapetyan, expert of Zhilfond Real Estate Agency: “It seems that only now, seven years after the 2014 Winter Olympics, the authorities have understood that Sochi looks attractive for investments. In my opinion, in medium and long-term outlook such resolutions [as the upcoming restrictions in the construction sphere] can strongly affect the realty construction market and as a result the entire economy in the [Krasnodar] region. The construction sector has always been the driving engine for the real sector that pushes forward the economy, which is why such restrictions may also have a negative effect. You may not put the entire market on hold as if it were some boring game – all decisions must be taken as the play progresses. For the sake of fairness, it is worth noting however that the very fact of development of the city development plan and the efforts aimed at formation of a certain uniform architectural appearance of the city is of course the right decision.”
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