Invest in Crimea becomes profitable

13.01.2011 09:34
Real Estate Market Analysis | Invest in Crimea becomes profitable With the onset of warm season southern coast of Crimea has traditionally attracted the attention of holidaymakers. But the peninsula is also of interest to investors who want to buy real estate.

The magic of the South Coast

Related article: Development scenarios for the real estate market in 2011

Experts say more investment attractiveness of the Crimea. Lilia Safronova, Manager of Marketing Group Artex (LC "Laguna") said that the peninsula has always been in demand for permanent residence and regular rest, but nowadays it is also of interest for investment in real estate. Now, when panic over the global financial crisis had subsided, and the previously active investor demand for facilities in the Crimea has increased significantly.

Konstantin Savin, managing partner of investment and development company "Pragma" (FA "Brigantine") considers Crimea interesting to invest in both residential and in commercial real estate. In the presence of all signs of investment attractiveness of the region - the popular resort areas, and a unique climate - professional players in the Crimean estate is still lacking. However, this market has good prospects. The most popular continues to enjoy a Soviet "tourist brands" on the southern coast of Crimea: Yalta and Alushta, smt. Miskhor Gurzuf Partenit, Foros - that is, the Big Yalta. Particularly attractive Gursuf and Mishor with their unique microclimate and wellness, nature reserves, parks, monuments, etc.

Gennady Zhiltsov, managing partner of construction company "South Beach" (FA "Nikita's Palace"), also claims that the Big Yalta - the undisputed leader in volume and rate of residential real estate. According to experts, the most attractive in terms of investment the region of Crimea. According to observations of K. Savinov, construction sites over the entire South Coast, and offers a variety of formats and concepts. The coastal zone is being built mainly resort facilities, but far from the sea - for permanent residence, demanded by the local population.

Impact of the crisis

During 2009 the real estate market of the Crimea were inherent in nation-wide trend. According to the Main Statistical Office in the Autonomous Republic of Crimea, during this period, the volume of construction works amounted to 1988.6 million UAH. And this is lower than in 2008 at 37.9%. At the same time in 2009 was commissioned in 387,300 square meters. m, which is only 6.8% less than in 2008 This situation is explained by the fact that inaugurated the house, the erection of which commenced in previous years.

The crisis in the construction sector have led to the fact that at the beginning of 2009 was suspended 80% of the implementation of projects. In the II quarter of 2009, some developers have resumed operation, but they were slower pace, and deadlines for buildings in the operation postponed. According to the company's "Real Expo, at the beginning of 2010 in the Crimea, there were 178 new buildings, of which 43 were put into operation, 122 were under construction and sales, at 13 construction sites only planned. In this part of the elevated, but not sold to housing was 24%.

With regard to individual cities, then, according to Anatoly Shakhnovsky, Director General of the IIR Cascade (LC "Emperor"), erected in Yalta, 71 new building in Sevastopol - 29 in Alushta - 23. The attractiveness of these objects is determined by the location, infrastructure and natural conditions. Among others, erected in Yalta, the following apartment complexes: "Nikita's Palace", "Laguna", "Gallery", "Brigantine", "Emperor", "Admiralty" and "House of Composers."

The crisis has affected all players Crimean real estate market. But Mr. Zhiltsov sure that this natural selection was a must. Before the crisis was over-saturated market of Yalta "bubbles" - projects whose sole asset was land. Their ill-conceived concept and as a consequence, the lack of sales led to stop construction. No price reduction is not able to block the financial risks of investing in an incomplete object. Crisis removed from the market of speculators selling air, and sobered buyers. It turned out that in reality projects with stable funding from its own funds or credit is almost there. So along with the falling demand and the market shows limited supply. Although in terms of reliability it is quite another proposition.

According to G. Zhil'tsova, about 60% of residential complexes SCC is not completed by the beginning of the crisis has not yet been completed. Work or not conducted at all or are maintained by periods when buyers can not raise funds. Developers, who invest their own money or credit, very little. Therefore, the complexes, which will be commissioned in 2010-2011. A bit - it's "Nikita's Palace", "Brigantine", "House of Composers", and the house of "console" on the street. Tauris in Yalta.

L. Safronov said that today in the Big Yalta (from Partenit to Mishor) actively constructed mainly apartment buildings and apartment complexes. The crisis dates for many of the objects carried on the average for the year ahead. However, the real estate market in the Crimea shows a steady growth both in terms of demand, and in respect of the cost. According to Alexei Bologov, manager of LLC "Domus" (RC "Caledonia"), consumer interest to the objects in the Crimea has increased by 40-45% compared with 2008-2009.

K. Savinov also fixes the resumption of demand for real estate SCC. According to experts, the demand characteristics of the object and literacy pricing. Appreciably affected by the seasonal resort activities. The prices have affected the crisis and policies. Part of the developers reduced the cost, others carry the action and make discounts. Thanks to these measures, the market grew, even in difficult periods.

In the south prefer

According to A. Shakhnovsky, the market of new increasingly popular class objects "premium" and "de luxe". G. Tenants said that the leaders demand are apartments in multi-functional LCD. After all, most buyers purchase real estate in Crimea is not for permanent residence, and for the holiday season, and an apartment in the IFC - the optimum solution in terms of time savings (due to proximity to infrastructure) and from a position of service. His view on the situation in Gennady Rudakov, Director of Marketing and Sales Company "Sevastopolstroy, a member of the Corporation's" Golden Gate ":" Despite the fact that the sharp decline in revenues for a substantial part of potential buyers led to an overall decrease in the number of transactions remains steady demand for cost-Rapid housing with a small quadrature, which in case of need can be leased year-round, as well as apartments by the sea. "

K. Savinov notes that housing in resort areas are buying not only for families but also to invest and continue to profit by reselling or renting out "gold" spa square meters. Today, the proposals are concentrated in two segments - "economy" and the elite. Lack of real estate of the middle class - a distinctive feature of the Crimean market. As for gentrification, there is a fall in prices was negligible. Formed adequately market needs and well "packaged" objects that are obvious, and not speculative benefits to the consumer, in demand and sold well, even in a crisis.

"As the summer residences of apartments are in high demand with the possibility of residence, as opposed to flats, where it is impossible to register and there are complex nuances in the field of taxation", - said K. Savinov. The most popular summer residence of the area of 50-60 square meters. m. In the higher price segment of buyers' interest cause suburban housing in settlements club type with its own infrastructure and distinctive architectural or other features.

According to G. Zhil'tsova, the most popular format today - apartments for sale in commissioned houses at $ 3000-4500 per square meter. m. For example, in "Nikitsky Palace" in 2009 sold the eight apartments, and in 2010 - 15. This is a very high figure, given the crisis and post-crisis period. The main circumstance which boosted sales of apartments in the complex, the developer considers entering the first stage in operation in September 2010 According to experts, demand for real estate SCC influenced the seasonality factor. So, in April-May this year showed a good growth trend in sales. This suggests that it will continue until the end of the year.

Price issue

As indicated Valeri Petrusevich, a leading expert on the Crimean estate construction company SoyuzStroyTehnologiya, real estate values in the primary market of the South Coast with the beginning of the crisis fell by 20-35%, and in the secondary - 50%. Prices may vary from $ 2500 to $ 15,000 for the quarter. m, but becoming mostly objects from $ 3000 to $ 6500 per sqm. MA Shakhnovsky adds that the cost per square meter in new Crimea - from $ 2000. The highest prices are traditionally at Yalta (the average value of the "square" - $ 2413, the range of prices - from $ 623 to $ 10,000). According to calculations K. Savinov, real estate cost of economy class decreased from $ 2000-2500 to $ 1000 per sqm. m. This is justified by the fact that the works are not renewed at all sites. Most construction is carried out through banks or strong investors who are able to attract to the project. However, low prices encourage the resurgence of demand for real estate, and today the market is definitely alive.

With regard to the loyalty of developers, then it says G. Tenants, the individual discount appeared on the Crimean real estate market before the crisis. Today, their size depends on the area purchased housing and terms of payment. But the mortgage on the South Coast is not relevant because of high interest rates. K. Savinov said that banks provide mortgage loans to be very careful, even at the stage of project implementation. Accordingly, the significantly increased requirements for the borrower. "However, in a segment of real estate mortgage is not so in demand", - says the expert. While there are difficulties with the mortgage, property developers offer their potential buyers installments. Such an opportunity is provided for the purchase of apartments in the Nikitsky Palace. " Annual installments, you can use when buying property in the residential complex "Brigantine.

An important point - the cost of maintaining housing. Among experts there is no consensus about the size of payments. According to V. Petrusevich, the most promising is the creation of SDMX and further cooperation with service firms in some parameters, selected residents (cleaning, security, landscaping, etc.). Under this option the cost of maintenance is reduced to 03.04 USD per square meter. m per month. LA Safronova indicates that the great demand for houses and complexes, which has its own operating company (security, cleaning, integrated maintenance, etc). Maintenance costs can vary from $ 1 to $ 10 per square. m depending on location, infrastructure features of the object and its living space. Utilities will cost on average $ 0.7 per square meter. MA Shakhnovsky notes that the cost of the property depends on the list of services and tariffs on them, which in turn determined by the format of the object. Declared operational costs ranging from $ 2 to $ 5.

In the LCD "Brigantine", where, besides the usual cleanup and mowing the lawn, will offer a personal concierge service, babysitting in their own children's center and the delivery of food from the restaurant, the cost will amount to UAH 10 up to $ 5 per square. m

According to G. Zhil'tsova, maintenance payments, as a rule, amounted to $ 1,5-3 per square. m, depending on the level and diversity of infrastructure LCD, quality finishes public buildings, areas and slum house territory, public tariffs for water, gas, electricity, etc. However, the expert said, most developers do not fulfill their commitments to build infrastructure, and maintenance reserve within the mentioned amount, which is true is outraged owners.

Some management companies offer owners of apartments in large apartment complexes, rental housing during their absence. L. Safronov said that in this case, the company's earnings is 20% of the rental cost and net yearly income of the owner reaches 8-20% of the value of the property. Such conditions are particularly attractive for foreign nationals (from Russia and CIS countries) are not able to frequently travel to the peninsula.

Ivan Danyuk
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