Russia has avoided the crisis in the housing market

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www.vsyako.netPhoto: Maksim Blinov / RIA Novosti

The transition to a scheme of financing construction projects through escrow accounts held on 1 July this year, has not yet caused a major crisis in the Russian real estate market, says family-owned Demyan Kudryavtsev, the newspaper “Vedomosti”.

As the newspaper notes, the developers managed to start many projects under the old rules. In Moscow on the same schedule, that is, the money holders, will complete two-thirds of new housing is 374 project 23.7 million square meters (data of Moskomstroyinvest). In the whole of Russia is about 130 million square meters (175 million taking into account non-residential areas), and about half of these buildings the Ministry of construction will be allowed to complete under the old scheme. Thus, developers have about two years to adapt to new building codes.

Nevertheless, the impact of the introduction of the escrow will be unable to decline, the pace of construction and increase the price of the apartment. According to “Vedomosti”, the growth will be from 3 to 20 percent. The most powerful influence on regional property markets, where a few strong developers, and the margins of the construction business is not as high as in Moscow and St. Petersburg. Some developers face bankruptcy.

From 1 July the Russian developers are actually forbidden to raise funds from investors to Finance projects (exceptions are made for new buildings at a high stage of readiness). Money home buyers will now be stored in escrow accounts which are not available for companies to enter the house in operation. It is expected that organizations will use Bank loans in the early stages of construction.

Earlier, in June this year, President Vladimir Putin acknowledged that the transition to the use of escrow accounts has already caused a reduction in the volume of housing construction in Russia. However, he noted that the new scheme of financing of construction projects is necessary and is designed to make the system of implementation of housing civilized and also eliminate the problem of defrauded investors.

Video, photo All from Russia.



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