On affordable housing, and not only ...

06.07.2010 20:34
General Director of consulting company "Samson" Alexander Rubanov in a speech at a seminar on low-rise building told about the financial and credit mechanisms for financing of suburban housing.

Much has been said that the building - the main instrument for overcoming the economic crisis, a time-tested. And this is true. But how to use the tool much depends. Hammer can also be: and the house built and to cockroach hunt.
Need to decide what we want to achieve, what we can achieve and what we will do for this. If the task is, as always, raise money, we can not even begin: the real estate market today - is already "dead cow" that milk does not make sense. What is the effect we hope to get from state regulation of the construction market in particular and the real estate market in general?
What is the role of government in the current environment in terms of specialists, is a significant part of the infrastructure of real estate market? Let's try to answer these questions.
There is an opinion that in order to restore market liquidity, need help, mostly with money, then all the problems go away by themselves. Without them (money), of course, nowhere, but I think - this is not the most important thing today.
Formulate the three most important thesis.

Internal Market

The development of the domestic market - the main challenge for any developing country. If we are talking about the real estate market, we must understand their market position: we build for whom we build. Today, the banality apartment we offer to our potential customer to give half of them produced for 25 - 40 years of product, while offering him a raise children and wake up with a smile on his face. 50 percent of the created product, we have formally arrested a citizen of fiscal instruments, 50 - to take on housing, 30 - for utilities. Not enough right? Maybe even on susekam scratched? Can offer people move to the dugout, as the apartments for the Ukrainians - it's too elegant?
When developing a marketing position to abandon real estate appraisal by using monetary units. Let's measure it cost man-hours or better trudogodami average citizen who works in the real sector of the national economy, producing a real Ukrainian product.
I have the impression that during the construction boom all the real estate marketing has been export-oriented. Looked like a portrait of the potential buyers of apartments in Kiev? Basically - an employee of a foreign company (almost no one but them could not show enough "white" salary in the bank for a mortgage). Who are potential buyers or the anchor tenants of shopping centers being built? International retailers, known global brands. Who is the financier? International financial services group in the face of a local bank. Foreign builders are not made his way into our market for only one reason - he is shown where "what's what."
We all hoped that there will be someone with a big purse and will buy the masterpieces, which we will build - at best. At worst - we create masterpieces on the big posters, and have a decent one it will cut dough.
So, comrades, to live. Property - is a factor of production, it is useless without the other factors: labor, business initiatives, other productive capital. Need to articulate what we do with this property: that we will produce, sell and buy? Nobody, except us, exploit our properties will not be, but it can take over. Previously, our policy was reduced to one - to promote the philosophy of rentiers in the behavior of economic agents: took out a loan, bought an apartment or office - live peacefully, real estate increases in value. And the work can not walk.
That must be really something to produce, were silent. The fact that the loans should encourage domestic production rather than inadequate, unbridled consumption, but still focused on imports, - this was silent. The fact that housing prices in Kiev than in Washington, though per capita GDP is six times lower and the dollar is overvalued in purchasing power in Ukraine, a factor of 2 - remained silent about it.
We thought that the new office centers can give the middle class. But where is he? With this level of GDP can not be middle class because most of the impoverished. It's funny, when someone proposes to increase taxes, forgetting that redistribute through the budget is actually nothing. We are producing too little, and the government multiplies the zero tax rate.
So the only way for the establishment of the internal market - is creating a national buyers and sellers. In order for people buying real estate, it is necessary that at their disposal, there are benefits they can offer in exchange for it. And if we do not want the apartment was worth one hundred trudolet, must be radically tackle the average productivity in Ukraine. Otherwise, soon we will live in dugouts.

Financial System

With our financial system also needs to do something. Here you can really talk a lot: the need for de-dollarization of markets in capital assets for fiscal stimulus, interest rates. That exist in developed countries about the hryvnia exchange rate and purchasing power parity. Theme is inexhaustible.
I will say the main thing. Monetary system built on credit. All developed countries use the loan for a new product. If the market needs in a product or promotion, the manufacturer is allocated a loan (if there is no money in the budget, they simply emit, sometimes hiding it for the sale of Treasury bonds unknown investor) to create a product, and as the consumer market for newly established credit returned product . Mandatory condition of such a mechanism - the unequivocal target use of funds.
Such mechanisms do not cause severe inflation, as issued by the money provided a new product. In Ukraine, do not know how to use the tool, including due to the imposition of stringent restrictions imposed by the international financial institutions such as IMF. For some reason the IMF is not beneficial to developing countries use the same tools that are readily used by developed countries. The true causes of this, our children learn from history textbooks.
I will say a few words about the mortgage. In Ukraine, was and is an extraordinary demand for loans. Why do not we lend capital assets in UAH - a very strange question, especially in the context of national interest. Lose seigniorage from their hands - a major fault of our oligarchs. If 16 years is not enough for you to ensure that trade in the markets of capital assets in the hryvnia, then how much more time we need? Or life will accept the fact that we are paying interest to another government for the use of paper money?
Recently, I heard the opinion of one of the bankers, that without the new law, which simplifies the process of withdrawal of collateral, banks will soon have no one to lend. So no need to walk away from this market, sell its assets effective competitors, and release a niche for those who know who and how to lend. Must honestly admit that this is not the absence of high-quality customers, and that the domestic banking system has proved to be ineffective. Banks and today still can not figure out who produces a real product, and who inflate the financial bubble, who can lend to and who not. The low level of risk management, financial diagnosticians, lack of control of macroeconomic risk, and, most importantly, pervasive corruption - so looks like today Ukrainian bank, even with foreign capital.
Mortgage under 30% per annum - a masterpiece that will go down in economic history with the names of the main "Fibber" to "How to do here." Ponabiratsya deposits by 22-24% and sit with them, like a dog in the manger, waiting for a potential bankruptcy in desperation to come and take credit at 30% per annum.
And now someone claims that it is necessary to allow foreign exchange lending again, forgetting about the rake, which made it hurt on the head just two years ago.
The credit system will operate normally when will experience a balance between domestic savings and investment. Drawing to stimulate domestic consumption savings of citizens and pensioners of foreign countries, we put ourselves in the credit and financial dependence, because do not have the opportunity to influence the course. We may be asked to pay far more than we took, and the National Bank has been shown to be powerless to do anything. Foreign banks will not miss the opportunity to play against the citizens of Ukraine, to redistribute property in favor of foreign entities, as in fact they are agents in the territory of Ukraine. By and large the entire history of the Ukrainian mortgage, which started in 2001 - is the story of how we purchased our property cheaply, then sold to us as expensive, but now simply withdraw in favor of foreign entities for debt.
Foreign banks are never offer attractive products to Ukraine. Must create their effective competitor that his example will show how to work. Today a lot of talk that there is no "long" financial resources for lending to the mortgage. In these circumstances, the regulator can be created by the state mortgage bank, which will host the target population (mortgage) deposits. Includes the principle: in order to buy an apartment, you must accumulate a certain amount (30-50% of its value). That is, citizens are saving on the target deposits, which are the resources for lending to those who have already amassed a sufficient sum to purchase the property, as well as for crediting the construction companies. The longer a person is the holder of the title of the deposit, and the large sum he had saved to purchase a property, the lower for it to be interest rate on your mortgage (ideally - at the rate of inflation). This mechanism was successfully tested in other countries and brought their financial systems to advanced level. An important condition for realization of the algorithm - use of funds.
When 90% of potential mortgage borrowers become depositors of the institution, when billions of hryvnia deposits will flow from commercial banks at the state mortgage bank lower interest rates (taking into account the fact that in the future it will be possible to obtain cheaper credit), can then be our Bankers come professional insight and understanding comes to their economic functions.
And last about finances. Necessary regulations to limit imports of consumer crediting. How to do it, knows better than the National Bank. Knows, but somehow does not.


Infrastructure - a "black earth", which grows that we encourage. For the real estate market infrastructure - is, first of all, roads, communications and social facilities.
Today we consider a low-rise construction in the suburbs as an alternative to urban apartments, which can move the housing market off the ground thanks to the vast opportunities in the issue of low cost of this alternative. Problematic factor that inhibits this direction - the infrastructure.
People are afraid to buy a cottage on novootvedennyh lands, because there is a lot of questions: Who will construct the road (or a lifetime ride on a dirt?), who will hold and will serve the electricity, gas pipeline, water and sewer who will remove snow in winter and clean the road, who will be engaged in gardening?
We're talking about that neighbor suburb is a good alternative to a city apartment - to go, you know, close. But it does not mention that at all highways in the morning at the entrance and in the evening when leaving the tube formed in Kiev as an alternative to those wishing to use too much, and the existing road infrastructure is inadequate to our brilliant idea.
Everyone knows about the need for the development and approval of master plans Kyiv region, which should give answers to many questions. Including with respect to roads and communications. Today, many do not know what to do with the site. People can not decide on the intended use of the land, because there is no master plan, which gives certainty and positive expectations. There is no certainty as to use - no cost. No cost - no trade, and land development. Collapse.
Or take another example - a simple local road that leads to the cottage area, broken up an emergency condition. Nobody knows when it will repair, who and for what means it will repair. Shall I buy property in this town? ..
We declare in Ukraine almost Scandinavian system of taxation, where 50 to 70% of GDP is redistributed through the budget. Only in the Nordic countries, people do not think about who will pay for road repairs. Money paid into the budget, come back in the form of social benefits. We have a budget, frankly, it - "black hole".
Necessary to establish simple and transparent legal framework: either we are three times lower taxes, and the people themselves build their own roads, schools and kindergartens, or increases the tax pressure, but to build infrastructure at public expense. Otherwise - coups, Independence, and other social unrest. Because where there is misuse of funds, there will always be chaos.

Proper use of funds is a prerequisite in each of theses I have proposed. I believe that the misuse of funds - the main problem in Ukraine. This applies to all spheres of our lives. When a loan is taken to create a product, is spent on the purchase of imported cars or helicopters in the economic cycle formed by a catastrophic mistake - the imbalances that lead to crises, one of which we are witnessing today. Everyone suffers. I am deeply convinced that the complex of problems that we see today in Ukraine, there is nothing but a consequence of systemic practice of misuse of budgetary funds. The habit of spending money for other purposes - is a course on self-destruction. I propose to understand it all, to formulate a new vector of development.
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