What will happen with new construction market in Kiev?

04.01.2011 16:03
Articles about real estate | What will happen with new construction market in Kiev? Housing is one of the most important human needs, and are unlikely to demand for it can ever disappear.

This postulate developers often use to show their invincibility before the crisis and emphasize the perspective of the industry. The new chairman of the Kievgorstroy Mikhail Golitsa was no exception, writes Nova apartment.

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At a regular meeting of developers Ukrainian Real Estate Club President reiterated the holding of the municipal market of pent-up demand and threats associated with the restriction of investments in construction.

With the capital construction market he knows firsthand. While one of the founders of Kievgorstroy Vladimir Polyachenko perfected his brainchild and was preparing for a path of retreat in the form of gaining control over the bank "Arcade", Golitsa in the KSCA was responsible for providing housing for people of Kiev.

In this case, the position of head of the main housing of city administration, he served from 1996 to 2010. Remove it from their homes did not even rampant "young team" the former head of the KSCA.

Besides, with the appointment Golitsy the post of chairman of the Board of Kievgorstroy "ending the era of Leonid Chernovetsky and influence the policy of holding.

In mid-December should already be aware of the audit results of the holding company Grant Thornton Ukraine. To check the current power of predecessors is standard procedure.

However, even if Canadian auditors identified serious abuses of the public is unlikely to learn. None of the current management of the firm does not want to worry investors. In any case, capital companies, though late, but fulfilling our obligations.

Golitsa himself reluctant to talk about the audit, he was more concerned about the attitudes of potential clients and indicators of the capital's property market.

Officer remembers all building records in the national and the Kiev market. He had no training may be called the volume of commissioned housing in the capital in any year.

Despite government promises to reduce the cost of square meters, the head of Kievgorstroy believes that talking about it early. Its easy to understand: he does not want to scare the consumer who is willing to buy now. In addition, buyers increasingly scarce resource.

However, all the measures the state to support the industry Golitsa approves. Several times, responding to a question from the audience, he even played the "PR man" program for affordable housing, to which in 2010 had allocated 100 million hryvnia. Total for this purpose is planned to allocate 230 million treasury hryvnia.

In 2009, the same program allocated 1.5 billion hryvnia, and market participants have always found a reason for criticism of such initiatives. Today, developers are more reserved in his statements, although the amount of injections almost five times less.

However Golitsa not particularly looking forward to the state, although holding and completes some of the objects in the program for affordable housing. He has his vision of the role of government, banks and investors in the restoration industry, not inherent to other developers.


- Are test results "Kievgorstroy" foreign audiences?


Work was completed on December 3, but they, by contract, there is still time to prepare the materials. Somewhere about a week.


- What is already known about the situation with the satellite companies holding, in which the allegedly blurred ownership interest "Kievgorstroy?


Wait. A week later, will know everything.


- How many sites are now building a holding company?

Now we sell about 100 apartments, placed in service. The remaining 1,300 apartments for sale are located in 22 buildings, construction of which is at different stages. Recently we have started to build an object on the streets of Alma-Ata, and have already sold it about 16 one-bedroom apartments.

Even against the backdrop of general decline in demand the number of apartments sold by us in November 2010 than the results in October 2010. Investors are positive about the changes in the company. First of all we are talking about the return of "Kievgorstroy" into communal ownership. Every month we sell more than 100 apartments.

- How much of the 2010 plan to implement?

Hard to say. In 2010, we sold about 1,300 apartments. Are now preparing for another ten houses, which have already developed construction documents and got the expertise. Now determined by the tender, because we have public utilities that are subject to the territorial community of the city.


- There is a delay in terms of construction?


Yes, we are violating the terms. Not everything is smooth and beautiful. There are many problems: economic, financial, legal, but nobody is interested. We apologize to the people who invested in homes and remain homeless.

There are some problems with hot and cold water, with lifts. However, our advantage is that we did at one facility did not stop work. We are committed.


- What makes a company to adapt to crisis consumer sentiment?


What people want? What can they afford? They can buy a studio apartment for 50,000 dollars, two-bedroom - for 100 thousand dollars. I'm talking about basically the number of consumers. We must react to it.

That will do the holding company? We design houses, where one-bedroom apartment - 47 square meters, one bedroom - 52-60, two-bedroom - 75-84. We have these projects are. Today, the ability of people, unfortunately, are as follows.


- What is the situation in the primary market? Are there any prerequisites for reducing prices?

Dynamics of volumes of capital investment is negative. For the nine months of 2009 the volume of investment in construction in Ukraine amounted to 35 billion hryvnia, and the first nine months of 2010 - 31,9 billion hryvnia. What does this mean?


This suggests that in the future offer will be reduced. Demand will grow, and the price will rise. In a prize will be a stable company.

In general, the real estate market situation in 2011 will affect the government's position and level of program implementation of affordable housing. We know that the accounts Minregionstroya is 100 million hryvnia.

Serious competition will be a decrease in cost. The Government is taking serious measures to simplify procedures for obtaining permits.


- This means that in 2011 the price will be revised?


- Kyivmiskbud "in the capital market sells home value of 8.75 thousand to 16 thousand hryvnia hryvnia per square meter. There is also a project for affordable housing program in Boyarka, where a square meter is 4,5 thousand hryvnia.

In 2011, I think we can reduce the cost of the capital market with state support to 7,990 hryvnia. (We are talking about reducing the prices of apartments built under the program for affordable housing, which can only benefit from a waiting list).

We will do everything to ensure that prices were falling. Of the city's budget for social programs provided significant investment that will be used on the principle of 50 to 50. Prices per square meter is around 4 thousand hryvnia. This will increase the amount of work load and construction organizations.


- That there is such a trend may be typical for the market?


- The population should be more than hundreds of billions of savings - in the refrigerator, glass jars, which they seized from financial institutions. In fact, this pent-up demand.

Convince people that it would be communism - all cheaper. I'm not talking about waiting, which in Ukraine, 1.2 million, and in Kiev - 113 000. I do the rest. They will not be able to buy housing for 4,000 hryvnia per meter, and convince them that there will be even cheaper.

The construction industry will be eternal, because there is an eternal need for housing. Born families, children, they will converge and diverge. Today laid the preconditions of the future "boom". Everything happens in cycles, my prediction - within five years.

We remember the crisis of 1996 when we were completely on the "bottom", and as we climbed. In 1994 he built a 406,000 square meters in 1996 - from 404,000 in 1997 - 416,000 in 1998 - 470 000, then - 800 years - more than a million. In 2008 in Kiev was built nearly half a million square meters of housing.


In Ukraine, the largest amount of construction occurred in 1987 - 21 million square meters. In Kiev, then built a 1,487,000 square meters. We repeated this figure in 2008. I think in three to five years, all happen again.

- What about a bill on urban planning, which provides a substantial simplification of licensing procedures? According to officials, it will reduce costs by 20-30%.

- These conversations are very harmful. The assumption that we will reduce prices, will lead to what people have written to the apartment. They do not need to cheat. If a person has a housing need today to buy today, then there will be only more expensive.

On the bill and actions of government and parliament. There are things that seriously affect the cost. Yes, some issues have already been taken into account - contributions to the city budget is reduced to 4-10%, but there are other problems.


- What is it?


- For example, the adoption of the operation of communications networks - is the first headache of the builder. Utilities, cable lines, highways - what to do with them? Now they are with us, we are forced to operate, protect and repair. And this question, unfortunately, the government decides, as it seriously affects the cost.

The second question - technical specifications. The law says that they are provided within the site or on her face. In fact we are forced to build a long-haul network to the site, which should be financed from the budget. It also affects the cost.

Third. Changes in legislation. Today, only banks and financial institutions have the right to raise funds of natural persons. Construction companies to the civil law allows to use other legal mechanisms - finance funds, bonds, mortgage.

Banks and financial institutions - the "brake". They do not take responsibility for funding, not funding from beginning to end, but take a reward. At certain stages of construction such charges amount to 18%. In this case, financial companies are essentially middlemen who would never meet. Responsible for everything the developer.


- That is, the developer must sell direct?


- And so he sells. I know many companies that sell directly. Another thing is that we then have to honestly say: the developer must meet, he has no right to create "Elita-Center". The bill, which moves in the parliament, the variants of criminal responsibility for such actions.

We should say clearly to the manager and chief accountant of a construction company, having authority to sign: funds-for building, it is sent to this object, and not to prepare another. If you do not - crime. I guarantee that after these changes, no leader will not want to do this.


Saved us from the banks' Elite-Center "? None. There were craftsmen who created the "pocket" financial company, brought an operational reserve, and fled.

- However, experts believe that without the credit market is not quickly restored.

- It is impossible to assess the role of banks in this process. The banks have their own program. If we take the company who have commissioned the house during the nine months of 2010, and ask one of them got loans they say: "None."

Loans to banks gave only her. Tell me, who can run 18-27%? Another thing, if banks lend to investors. I'm not talking about 7%, at least for 12-13%.


- It is not clear: a government bill eliminates corruption component in obtaining permits or not? Or reduce it cost?

- The bill is a constructive thing. How he gets out of committee? What amendments will make the deputies? Talking about it will be after the signing of its president.


- What are the rules of this document you find objectionable?


- For example, the sale of land for auction. The law "On State Budget", which was taken in late 2009 by the previous government, have recorded that all the vacant land will only be available at auction. We wanted the best.

Then what happened? The village shop can not be constructed as needed to conduct the auction. And who wants to go to the auction? None. Only then realized that we needed to develop the procedure.


- Previously, land is allocated without auction?


- Free land is not allocated. Then the "craftsmen" started looking for options - buying a shed or put something like a barn on a certain area and sought transfer of the property through the courts. "Craftsmen" we have!


- Kyivmiskbud "perform construction work within the framework of reconstruction NSK" Olympic ". Why is the cost of the project exceeds the cost of building a new stadium?


- Upgrading is always a more expensive new construction. However, today the new stadium is not needed. Olympic Stadium was built in 1924. Even then, there was a football field 70 at 120. Reconstruction of the stadium took place four times.


- And what about cost?


- A figure such as it is. There is government control over the expenditure of money. (The cost of reconstruction "Olympic" in Kiev is 4,2 billion hryvnia. Erection of Donbass-Arena "from scratch was worth $ 400 million).
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