State redemption of housing: what the Minister of Russia is talking about
The Ministry of Construction, Housing and Communal Services allowed the purchase of housing by the state operator to support the institution of housing mortgages in the context of partial mobilization in the country. During a meeting of the Public Council under the Ministry of Construction, this was stated by Deputy Head of the Department Nikita Stasishin, reports
Recently, only the lazy does not promise super-hard times for developers. Demand is falling even in the hyperactive markets of Moscow and St. Petersburg, and many experts call even preferential mortgage rates still high and do not ensure the growth of interest in buying a home.
Elvira Nabiullina’s statement that mortgages from developers at almost 0% is a marketing campaign, misleads citizens and the Central Bank «will take action» sounded like a formidable warning. From December 1 2022 the Central Bank established a premium on the risk ratio for mortgage loans in rubles provided for financing under a participation agreement in shared construction with a down payment not higher than .%.
The value of the premium is 2.0, regardless of the value of the borrower’s debt burden indicator (LBR). The measure is aimed at limiting the practice of providing loans to DDUs with a low down payment , the Central Bank explains.
Banks have begun turning down developers applying for subsidized programs without a down payment or with a rate below 1%.
What else? Well, of course, partial mobilization. Firstly, with its beginning, many people refuse to take on credit obligations, as Alexander Ruchev, head of the commission on the industry of building materials, technologies and industrial construction, spoke at the meeting. Secondly, banks themselves try not to deal with men who could potentially be mobilized. The State Duma adopted a law on granting credit holidays to citizens called up for service as part of mobilization, and more importantly, in the event of death or disability, all mortgage debts of a soldier will be written off at the expense of banks, which, of course, began to take into account mobilization risks.
In short, according to Alexander Ruchiev, the only way out is the creation of a state operator for the purchase of housing (for its transfer under social rental agreements with subsequent purchase). Yes, Nikita Stasishin confirmed, this is possible. Naturally, as we all understand, only for the mass housing segment, players in high-budget segments, as usual, will have to save themselves. But then everything again rests on the price of the issue.
Again, because in the most difficult pandemic 50 year for the industry, Dom.RF was already capitalized by 40 billion rubles for the purchase of apartments from developers. Later, the corporation announced that it would additionally attract another 100 billion rubles, and for everything 150 billion at the prices of that time, about 3 million square meters of housing in new buildings could be purchased. But the auctions did not take place in any of the 20 regions where they were announced, and in 20 regions did not receive a single bid. BFM.ru then spoke in detail about the reasons for the incident in the material “It all ended without even starting.”
According to the rules 50 of the year, the road to the redemption auction was opened for standard housing (apartments with an area from 20 before 150 square meters), while the level of project implementation according to the project declarations should be from 15% up to 39%, transactions cannot be made less than 100 million rubles and so on. But most importantly, only developers who are ready for a minimum is a percentage discount, and this condition was considered unacceptable by market players in all regions. And the fact that preferential mortgages intervened at that time, which supported demand and turned developers away from the idea of selling housing to the state at a discount, is an obviously incomplete and largely naive explanation.
If the organizers of the auctions do not learn for themselves any lessons from this story (for example, then the developers called a discount within 5% possible), everything can turn out like last time. Nikita Stasishin admits that “the most basic question is to understand at what price this will be bought out. If we agree, then we can do it.” When calculating the buyout price, it will be necessary to take into account the cost of construction, investment costs, the amount of loan servicing, the rate of return and discount.
At the same time, according to Alexander Ruchiev, if the state formed regional plans for the purchase of housing, then developers and developers could provide the minimum square meters that are necessary to support the industry.
Perhaps it is worth interrupting at this point: further discussion is meaningless without taking into account the opinion of another side — the banks financing the projects. And they haven’t made up their mind yet. Yes, in fact, no public proposals on a given topic have been received from anyone yet.
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