The black square in the property market

07.02.2011 09:22
Real Estate Market Analysis | The black square in the property market Housing in the primary market of Kiev will cost no more than a thousand dollars, social housing - $ 500 per square meter, said Prime Minister Mykola Azarov during the second half of January. The Government has agreed with the builders to lower margins.

Wonder why the authorities began to direct orders in the construction sector, with Kiev, as the capital of the highest demand for housing and, accordingly, the highest price. According to the company SV Development, in January, price per square meter in the primary market amounted to 12 thousand UAH.

Related article: During the six months elite real estate in Kiev fell to 5%

To achieve the stated price at 8 ths, builders need to reduce the cost of housing by 50%. "More than low prices will not be. Prices, which today we have outlined are the minimum level of profitability for builders," - said the prime minister. According to him, the minimum level of profitability - is 5%, says Finance.

Theoretically, to achieve the stated price at 8 ths or even 4 thousand UAH in Kiev can be. "The average cost of housing in the capital is 800 dollars per square meter. M", - says Anatoly Shakhnovsky, CEO of investment and development company "Cascade".

"But the cost does not include the costs of mandatory payments to the city, construction of utilities, etc.," - said an independent real estate expert Jaroslav Tsukanov. Given the crisis in the primary market, the statement Mykola Azarov does not seem so weird, because the builders will be happy with any money. Although they can not always offer accommodation at this price. Because if it is revived demand, according to the laws of the market will soar, and costs.

While it is unclear whether the apartment of 4-8 thousand USD / sq. m for all or only selected when the cheaper square meter, and how welcome would react to the builders of the initiative power. "If the government initiates a program of low-income housing, then realize it is necessary to prepare another draft, which will involve actors playing field", - said Anatoly Shakhnovsky.

Contracts not surveyed builders against restrictions cost of housing up to a thousand dollars, "We are now participating in the program" Affordable Housing "and sell people Apartment for 8 thousand USD / square meters. In the primary market crisis as well, at least, to We receive funds "- said Viktor Vlasov, General Director of SC Gradstroy. Recall, this program was launched in May 2010 and involves the payment by the state 30% of the price, the remaining 70% is making purchaser-waiting list. Its main goal - to revive the construction industry in Ukraine, which after a crisis has died down.

Statement by Mykola Azarov on the cost of social housing in the 4 thousand USD / sq. m builders perceived favorably but with reservations. "If the city would not require me to additional mandatory fees and payments, construction, utilities, then I can build an apartment at this price" - says Victor Vlasov.

Another question - who will buy social housing. "The main categories of waiting - large families, the disabled, that is, socially disadvantaged population. It is unlikely that they can be considered as potential buyers, even at lower prices", - said Anatoly Shakhnovsky. "Social housing - is not small apartments of poor quality, which is building the state. The apartment is transmitted by a low-income families without privatization. What has in mind the state, talking about 4 thousand USD per square meter, is unclear. Maybe we are talking about the program" Affordable Housing - Jaroslav Tsukanov doubts.

It is not known when the house fall in price to that amount. Apartment prices in the primary market can not suddenly fall. "It is necessary that the city council started for free or for a minimal amount to allocate plots to builders simplify the issuance of building permits in line with the recently adopted law on urban planning. Then, to achieve the stated prices are really" - says Yaroslav Tsukanov.

Even if such a price reduction to occur, then a year and a half, when the house at a low price will be completed. But the builders are confident that the industry can not save as much decline in property prices as affordable loans to buy apartments. "Residential real estate market has stagnated, and no mortgage to strengthen the sector will not work", - said Anatoly Shakhnovsky. However, the pre-crisis years of experience shows that growth in demand for housing will inevitably lead to a rise in price of real estate.
Content tags: Housing New buildings Kiev
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