After five years of housing price will rise by 2-3 times

23.03.2011 10:37
Articles about real estate | After five years of housing price will rise by 2-3 times Kharkov Branch of the Institute Gorshenina under special project "Forecasts of economic development in the region in 2011" asked the expert opinion on the situation in the housing market in Ukraine.

On the prospects of this market, real estate prices and utility tariffs told the deputy chairman of the Standing Committee of Kharkiv City Council on Housing, development and engineering infrastructure, CEO of ICS Avantage Anatoly Denisenko.

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- This year, many experts describe as a period of pent-up demand for real estate. How this situation affects the construction?

- We have a pent-up demand is formed over the past hundred years. If we take the average amount of living space per capita, it is five times less than in any normal country. So I would not speak about the pent-up demand - it is so large that the deviations of 5% in either direction - is unimportant. The economic crisis and global market affected the economy of Ukraine and income levels, and banking system is not able to provide people with a mortgage. All these reasons have reduced the demand for real estate, and now it is minimal. Due to low demand from the market had gone all the non-professional players. Several years ago it was fashionable to do construction, and prior to the crisis in Kharkiv was 25-30 construction companies.

- How many companies did it go?


- Almost everything. In the market there were only a professional company.

- Can you transfer?


- Stayed "Zhilstroy-1", "Zhilstroy-2", "Kuryazhsky DSC", "Avantage" and another 2-3 companies. Was 30.

- What steps "Avantage" to attract a buyer after three years of crisis?

- At a time when demand is minimal goal of the company - to make the most popular and acceptable product. First, we reviewed all of its projects and adjust them so that they were most in demand by our customers.

- This applies to prices?


- You know, the price - it's derivative, it consists of certain components. We are working on components so that they reduced the cost of housing. To talk about square meters, but people do not live in them, and in apartments. Therefore, we are reducing the area of ??housing to buy it was a force, but also looking for niches in the market. The company "Avantage" differs from others in that we focus exclusively market - that is, do not deal with budget programs. There is a certain product, and there is a potential buyer. There is a certain group of people who are able to buy an apartment. Our task - to find this group and make the product for them. Here are quite clever, clear any capitalist thing.

- What groups of people now come to the forefront - the buyers of economy class, business class?

- To begin with, what is economy class. Often this housing is associated with the concept of "affordable housing" and the problem that should be decided by the state. Cheap accommodation or economy-class demand by people who have very low incomes. And they can not buy an apartment or a $ 100 thousand, or 50 or 20. They simply have no money. Therefore, we focus not on those people who really need housing, but they can not buy it, but on those who can. At the moment we just can not give people such installments, as before, because there is a problem with credit, and price per square meter, and so low - below cost, or equal to it. We can provide hire, but in a very short period of time.

- Do you think that what is now better selling apartments - studios, doubles?


- You know, "hot cakes" are not. And to say that some apartments better selling, I would not dare. Buy those apartments that need a particular family. There is no definite trend. Before buying an apartment has been the subject of investment, but now, this segment was gone. Real estate is not interested in people as an investment in the short term. But, I am sure after five years the price of it will rise substantially.

- Is it more expensive?


- I think a square meter will be more expensive in two or three.

- Do I understand that your company is in the "Affordable housing" is not involved?


- The "Affordable Housing" - state. We are engaged in it, building a shelter. The man who stands in line for an apartment and has some amount of money can buy an apartment from us or from "Zhilstroy-1, or a" Zhistroy-2, and the government compensates him part of the cost of the apartment. Companies simply offer an apartment. Presumably, in the Kharkiv region this year will be allocated about 30 million UAH. 30 million UAH - to plus 70 states - from wanting to buy an apartment, get $ 100 million. This is the cost of a house for 100-150 apartments. In fact, the program - classroom, but it does not solve all problems.

- Recently, the Verkhovna Rada adopted the Law "On regulation of urban development, simplifying permit procedures of construction. In your opinion, how many times his mechanism to work?


- This long-awaited law. We will be able to reduce the time of negotiation of our projects - from 460 to 90 days - and the commissioning of facilities, as well as significantly reduce contacts with regulatory authorities. Also to 23 decreased the number of permits. This is a huge plus. For it to be fully earned, ministries and agencies must develop all legal documents such as application forms and so on. I think it will happen in two months.

- How attractive in terms of investment do you think the construction industry, in Kharkiv in particular? You attract to yourself?


- Investments can involve only ourselves. Our task - the right to determine what and where to build, to a maximum effect, including economic and choose the correct method of financing. After all, why the industry is worth? Construction - an indicator of the status of all macro-economic processes. In a good economic environment, where everyone has a job, people are willing and able to improve their housing situation, as companies - to build himself a new building or manufacturing plants, construction develops. In this situation, unfortunately, this is not observed. The main engine of the construction industry of today is the state - infrastructure projects, maintenance of the economy which is already there. State tries to give "oxygen" to the industry to have contracts. By adopting the new law, the government will also stimulate the interest of foreign investors to the country from the standpoint of the permit system. However, important and technical and economic indicators. In this area we have so far not so good - the money in the country dear, and construction - this is a very receptive process, both financially and in time. Accordingly, much interest from investors, both domestic and foreign, are now to construction sites is not observed.

- What will be 2011 for the industry? Your prediction.

- I believe that 2011 will be a watershed and predict the growth of all indicators since the mid-year. Let me explain why. Firstly, there is a serious improvement in terms of a regulatory system - to make it easy entrance into the business. Secondly, the global economic situation is unfolding in a way that Ukraine receives some competitive advantages - higher food prices, metal and all the goods that Ukraine produces. Accordingly, it will allow the Ukrainian business to make money, and that he will serve the main investor. Also taking place in Ukraine, reforms will lead to Ukraine multinational companies. First of all - engaged in processing agricultural products. And if these transnational companies to build production capacity, it will increase income of the population and increase revenue.

- In February, the President of Ukraine Victor Yanukovich said that the tariffs for housing can be reduced by removing redundant enterprises providing public services to the population. Is there a company in Kharkov, which can be cut?


- When Viktor Yanukovych said on utilities, he often uses the positive experience of Kharkov. But in this case is not about Kharkov. Reduce tariffs for housing can not be for several reasons. In particular, because, because the modern world is subject to inflation. Accordingly, all fees, including housing, will grow and grow forever. Just the money can be more effectively used if the housing reform. A general problem we have is that this industry is originally dating from the segment of the economy, and sooner or later will be taken very unpopular decision - to make housing and utilities, at least, self-sustaining.

- How many of these businesses only in Kharkov?


- Maintenance of homes have 6 companies, including, in fact, "The company is operating residential Avantazh.

- Me, as a resident of the city are interested in that these services have worked in quality. After I pay for housing, as for any other services. How can I make sure that they fulfill their obligations?

- Very difficult to determine what comes first - do not work, because it is cheap or pay cheap pay, and therefore perform poorly. I can tell you that, to date, high quality service of a square meter, depending on conditions at home, klassnosti and availability of infrastructure costs from 3.5 to 6.7 hryvnia per square meter, and we pay 1.47 hryvnia. At the same time you want for these 1.47 mane live well. But that does not happen. Price 1.47 adequate quality and quantity of services that appear on this value.

- The data on cost of services services - from 3,5 to 7.6 hryvnia? You do them calculate "?


- Yes, that's what we thought to ourselves. We are engaged in similar business. More precisely, this business can not be named - we operate from their homes.

- And how much the average pay tenants of houses, which operates the "Avantage"?


- In each house - its cost. Tariffs within our calculations. We do not have the capacity to subsidize, we do not have government budgets. Here, around the world have municipal tax, and his men are paid on time. For example, in the UK in a provincial town, he is an average of 150 pounds per person per month. Moreover, the tax deadline - 25 th of this month. If a person did not pay the amount of tax increases by 7 times and he is given the opportunity to pay up to 30-th, and if he and this time does not pay - the amount has increased by 7 times. Obtained 5,000 pounds. If he does not pay, comes the executive office. It is clear that in our country 150 pounds - it is absolutely impossibly money. Well, let it be not 150, let - less than 5 pounds. And so it turns out that the city government has no resources, but there is a commitment. Due to what they do? From revenues to the city budget through taxes or something else? For this city must first develop. And, in our situation, due to municipal tax, he can be kept clean and tidy.

- Such a tax could introduce us?

- Do not impose, because it is unpopular. That the housing and utilities to restore order, there are two ways. The first - bringing the total market in the plane when there is real value of real services. And the second - people need to create some communities, communes, and bring it all in order of their own efforts. Consumer attitudes to change - or pay for everything in full, or if there is no money to do themselves.

- But what then meet the operational service is they have some responsibility?


- If a keeper 10 yards in salary in 1200 hryvnia, whether he is able to remove such territory quality? Not able to. We, as tenants, on the one hand happy to pay a little. But on the other hand, when we see that for the money that we pay, respectively, and clean - we do not like. Need to be honest with you. For example, in other countries, cities divided into districts inhabited by the wealthy and less wealthy people. In some people pay, we assume 1.40 hryvnia, others - 3.5 hryvnia. But we have to do it hard.

- What projects in your opinion, not enough city?

- Probably, Kharkov lack of comprehensive projects. Now all of the projects - point, and serious, to carry out reconstruction of the whole block, remove from him all the ugly sheds - none. Unfortunately, complex projects very succinct in terms of finances. Also, in my opinion, not enough infrastructure. I watched with amazement over the situation with the construction of new roads (Gorky Park - aut.). To tidy up the city's infrastructure, you need to build at least 10 of these roads every year. And not only roads but also sewerage, water pipes and everything else. With regard to the Kharkov architecture, everything is built, at least for me, does not cause rejection.

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