President of KAN Development Igor Nikonov told ABCnews about what Kyiv lacks and what he would change in the capital in the first place. ABCnews talked with the honorary president of KAN Development Igor Nikonov. In the first part of our conversation, we found out how difficult it is for developers to search for plots for their projects in Kiev, whether it is possible to solve the issue of an obsolete housing stock in the near future and whether Moscow developers are reliable.
There is a legend that in Kiev there is no land for new projects for a long time, but in reality their number grows, and they themselves become larger. Paradox?
That is, mostly developers, including KANDevelopment, are taking plots for their projects in the secondary market?
Yes. For example, the site for our project "Faina Town" we found in the secondary market, this is a former enterprise. Usually we are talking about agricultural or industrial enterprises that have not worked for a long time. For large projects, only such options are suitable. Many developers in this way also go. Another option is to take some building or structure, and then this building either reconstruct or demolish and then build a new object.
Since you mentioned "Khrushchev", how do you see the solution of the issue with their renovation?
Not yet. The cost of resettlement "Khrushchev" should go into the cost of construction. If the market is at the level of sufficient prices, for example, in 2007, then investors will be interested in investing in this money. Conditionally, having built one house, they will be able to move there residents of "Khrushchev", and in the same area, and build on. While this issue is not even worth discussing, it is impossible.
In general, this decision should be at the city level?
No, it should be a state program at the level of law. Because you can, of course, try to negotiate with all residents, but if one of the tenants is against, it will not work. After all, there is as yet no legislative basis, according to which, for example, 60% of the tenants' consent is sufficient.
How do you assess the mega-activity of the housing construction market in Kiev in recent years?
Honestly, not very good. It is necessary to understand that you are building not for one year, but for many years, that you need an infrastructure and every day transport communication will become more complicated, as cars become more and more. But not all developers are ready for this kind of thinking. Not everyone is interested in even their own name, authority, reputation, and even more so - the future of residents. There are many who did this one-time. There are those who tried, he by chance turned out, and he decided to build another object. Moreover, if you dig deeper: how much do you identify the beneficiaries of these developers? I assure you that 80% of owners in the development business are unknown, and this is bad. Everyone should be identified, as, for example, in the banking system.
Who should regulate the question of who can and can not be built in Kiev? Do we need to regulate this at all?
Very difficult question. I believe that it is necessary to regulate. Developers are working in the market of services, using investor confidence. And now it is not backed up. With the fall of the market, the units will remain more or less stable, others simply "collapse". There must be a mechanism in which developers will give personal guarantees that they will complete their projects. Then they would be much smaller and housing would be built much better. Therefore, I believe that there should be some sort of accreditation or something like that for this kind of activity.
On the development?
On the one that gives the opportunity to sell on parole, as it is actually done today. By and large, people buy apartments, but no one guarantees that the project will be completed.
You said about the quality of construction. For you, quality is more important than quantity? In the Ministry of Regional Development, for example, consider the contrary.
They have a different criterion. They are not the subject of this business.
Is this the right criterion?
For them - the right one. Their task is to provide people with housing. After all, if the housing is built, even if the market falls, it will be sold at least for some price, and people can afford to buy it. Today, the price of housing is very affordable, even considering the minimum wage. To some extent, a mortgage has already appeared, and many developers provide installments. Therefore, for a working family it is quite possible to buy housing. If the refinancing rate of the NBU decreases, mortgage loans will be at perfectly normal rates. The main thing is for developers to give guarantees on their obligations.
Is it necessary to state the issue of obligations?
Not regulation, but guarantees. For example, I have to deposit in the bank.
Of course. For example, make some state bank authorized to receive such deposits. Let it be less than the total construction budget, and let it be reduced as the construction becomes ready.
By the end of 2017, it became obvious that forecasts about the collapse of the market were not justified. What do you think, why?
For a crisis or a collapse to occur, you need some sort of trigger, a mechanism that will launch it. After all, if in 2008 there was no history with Lehman Brothers, then, maybe, there would not have been that crisis at all. This is just a coincidence of circumstances that may occur, or maybe not. I hope that this time nothing will happen, because the collapse is very serious and long for the real estate market: it falls very quickly and is very difficult to recover.
What are your predictions now?
I know one thing: the buyer now needs to carefully choose the apartment when buying. Either acquire ready-made housing, or from a trusted developer. I would not advise anyone to buy from an unknown company.
It seems that you are the first developer who advises buying a house in finished objects.
Why not? If you are not sure about the developer, why take chances? Yes, you need to wait a bit, pay $ 50-100 more for a square, - but there are no risks.
Does there really have such a huge number of new buildings a real buyer who can pay for the apartments and who is he?
Understand, if there is a mortgage or an installment plan, then there is no need to immediately have the full amount on hand. Now the main buyer is simple Kyivans and visitors from other cities. Many live in conditions that do not satisfy them, besides, before there were neither such prices, nor such installments. If earlier the cost was $ 2000 for the "square", now it is $ 800. A combination of these circumstances and forms a portrait of the buyer.
That is, they buy an apartment for themselves?
Yes. Housing, as a rule, for themselves, not for investment. Although, of course, they buy both as investments and for renting. Let the income be small, but constant, people believe in it. The only thing that seriously impedes the market today is the unresolved issue with a zero declaration. Many people come, ready to buy an apartment, and say that they can not confirm the origin of their money. Although these are not officials - ordinary people who collected them all their lives. But in fact before there was no regulatory duty to declare your income. The fact that they have not carried out the law on the zero declaration is seriously hitting our economy. As a result, the markets for apartments, cars and other things do not get enough: people put their money back under the mattress. To whom this is better - I do not understand.
If you go back to Kiev, what approach do you think is right for housing construction: quarterly, spot development, your option?
The correct approach, of course, is quarterly development, when the entire complex with the full infrastructure that should be there, including schools, kindergartens, hospitals, etc., is designed and built. But this is not always possible.
For what reasons?
Not everywhere there is an opportunity to approach the issue in a comprehensive manner. In this case, you can not just say that you need to build only quarterly. There are, for example, dotted areas in the center. Actually, share participation also exists in order to build on the money received from it to build a social infrastructure.
What does Kiev lack now?
Basically - bypass roads, which would ensure the transit traffic not through the city. And, I remind you, there is a tunnel project from Victory Square to Darnytsky Bridge, which could substantially relieve the city. In all cities the issue of transit transport is important, but we have not solved it because of the many administrative problems. For example, until now, for some reason, half of the District belongs to the city, and half - to the area.
There is an opinion that the main problem of Kiev is the lack of a development strategy.
This is not true, there is a strategy, but it must be very flexible. You see, the mayor does not have the fullness of power, which would allow him to say: "in place of this plant there will be only a denouement or a public center." Because there is a plant owner, and everything depends primarily on him. We live in a period of de-industrialization that has not yet ended, and in the center of the city there is still a huge number of enterprises that should not be there for economic and environmental reasons. And, most importantly, their products are no longer produced or demanded. Of course, I'm not a supporter of closing all the plants, and in their place to build housing. On the contrary, the enterprise in the center of the city is the place of employment of labor, and there it is necessary to make some modern ecological industrial parks that will create jobs. But to do it is not so simple, because there is a property right, and you can not get away from it.
Now the outward appearance of Kiev is far from ideal. Looking at the capital, what three things would you like to change?
The first is to change the procedure for dealing with monuments of history and architecture, it is necessary to give permission for their reconstruction. Among them there are a lot of buildings that have nothing to do with monuments. They hung the signs "newly created monument" with only one purpose - to simply take money from people who would like to do something with the building, and they would need to remove this sign. Those who hung the plates, have long been out of the field, and the tablets have remained. The second is to give the right to a private investor to recreate real architectural monuments. For example, I do not like that a huge number of elegant old houses are in Kiev and are simply being destroyed. And the third - Kiev needs an active, well-made embankment - what is in every city in the world in which there is a serious pond. Unfortunately, we gave the embankment cars, but in fact there should be a developed public zone. Or, you need to transfer it to the other bank, to the left-bank district. And, of course, it is necessary to modernize the Hydropark, to turn it into a place of proper mass leisure.
Natalia Kushnir, ABCnews