New buildings can greatly increase the price

05.08.2008 00:00
Articles about real estate | New buildings can greatly increase the price The city authorities several times to increase mandatory contributions of developers to the city budget for the right to erect houses.
While in government summit has been talk about reducing the cost of construction by reducing the cost of paperwork and the allocation of land, the city authorities continue the policy of squeezing money out of developers.

Now the share of contribution to the city budget to pay people of Kiev, who decided to place on your site toilet, garage or shed

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A few days ago Kiev City Council approved changes to the municipal budget. This document is attached and the Kyiv City State Administration proposed a new procedure for calculating shares, payable to the developer in the capital's coffers to create a social, transport and engineering infrastructure. And this procedure, despite the fact that he adopted in the budget, will operate after the end of this year.

Now the builders of many types of real estate, primarily residential, will significantly increase the royalties city. In particular, shares of companies that build luxury housing, the city council has increased in 9,8 times, or at 179 hryvnia 60 cents (up to 200 hryvnia per square meter of surface area). During the construction of cottages and houses a garden type Superior Builders will pay the city more in the 7.3-fold, to 129 hryvnia or 60 kopecks (150 hryvnia for every meter).

Hard times and have developers who prefer to invest in the development of the urban service sector and business. Shares in the construction of hotels in the city council has increased 3.74 times, or 219 hryvnia 70 kopecks (up to 300 hryvnia a "square"), administrative and office buildings - to 3-fold, or at 235 hryvnia (up to 350 hryvnia) if their area is 100 square meters, and 3.5-fold, or at 285 hryvnia (up to 400 hryvnia), if the area exceeds 100 square meters.

Also raised several times deductions investors who want to build manufacturing, transportation and other household objects. Kiev deputies decided not to raise the mutual contributions to the construction of social housing, leaving them at the current level - 20 hryvnia 40 kopecks per square meter. Although the metropolitan state administration and offered to increase their contributions nearly doubled, to 40 hryvnia from one "square".

True, the amount of share contribution also depends on the location of buildings. Factor by which the rate increased allocations as they approach the city center, the city council also increased to 1,25-12,5. That is for the construction in the heart of Kiev have to pay 12.5 times more than in the suburbs.

There is the adopted procedure and other original innovations. For example, now share fee to pay also for the construction of ancillary buildings and facilities for maintenance, regardless of ownership and the type of developer. That is, this rule applies even to Kiev, who decided to place on your site toilet, garage or shed.

Change the bids share contribution will enable developers to get the city in addition to a billion hryvnia per year

The city authorities do not conceal that rely significantly supplement the city budget at the expense of developers. As first deputy chairman of the Kyiv City State Administration Denis Bass, made changes in rates of share premium real estate developers will be given the city an additional one billion hryvnia for one year. Moreover, he argues that the new mutual deductions do not exceed 5 percent of the market value of real estate projects under construction.

Builders such calculations clearly disagree. According to "FACTS" representatives of several capital construction companies, if until recently they were forced to give the city an average of 10 percent of the value of the object, but now this amount will increase to 15-17 percent. That's not counting the apartments, which are transmitted free of city administration.

In addition, the technique has many weaknesses, allowing officials to take a final decision at its discretion. This, according to experts, will inevitably lead to corruption. For example, how to define "elite" or "social" site? In the domestic laws and regulations is no such thing, and indeed the classification in Ukraine has not been formally adopted. There is only one classifier, which was approved by the Builders Association of Ukraine, but as a public organization, it has no official status.

With regard to the impact of new regulations on capital market housing, builders recognize: they will either have to tighten their own belts, reducing the profitability or raise prices, shifting the costs onto the shoulders of the end customer. Previously after similar increases in payments to the city treasury developers often chose the second option is the solution. But today the situation is different. People who want, or rather, financially able to purchase an apartment in the new house is getting smaller, and developers increasingly difficult to sell square meters. Therefore, the next rise in the Kievan new buildings can finally frighten those few customers who were able to collect the required amount or by some miracle, got a bank mortgage.
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