''In case of cancellation of equity construction, market players talk about a growth of prices for dwelling…''
New rules of financing of house development will encourage a growth of prices for real estate. A new type of investors is appearing in the market of the commercial real estate, while offices in Moscow are running out. Such tendencies were announced at the 9 th financial realty forum in Moscow. Realnoe Vremya tells the details.
Future of equity construction
Minister of Construction and Housing and Communal Services Mikhail Men became the headliner of the main programme of the 9 th realty forum. A pile of questions concerning the transition of constructors from equity agreements to project financing collapsed on him. This will significantly change the market. However, even the banking sector isn't ready for the process:
''Banks were not only not ready to open escrow accounts by 1 January, they weren't ready to perform banking accompaniment,'' Men claimed.
Meanwhile, the ministry is preparing amendments to refuse equity construction. Mikhail Men didn't reveal the details but explained they would be about the rule ''one developer – one permission for construction'' and could provide big developers with an especial refusal from construction.
Prices will change considerably too. ''It's no secret that if there is a new intermediary, prices grow. Here an intermediary in the person of a commercial bank appears. Now it's difficult to forecast its volume. Several market players say about 6%, some – even 20%,'' Chairman of Moskomstroyinvest Konstantin Timofeyev noted.
Banks grant loans with unwillingness
Banks' requirements for developers will also be tightened. As credit institutions will become full-fledged participants of the process, they can tighten requirements for projects, reputation, experience and financial stability of a developer, Director General of MIEL-Novostroiki Natalia Shatalina believes.
This, in turn, will drive small players out of the market, experts are sure. Small developers still have problems with money borrowing in both the residential and commercial sector, noted head of the representative office of Rossmils in Russia Aleksey Mogila. ''The market has money, there is much money. Risk-takers are aware, the Central Bank's requirements are tightened and become complicated,'' the expert complained. He added the banks from the top 10 highly formalise requirements for projects and aren't ready to be flexible.
Such a situation brought a new type of investors to the market – small official and unofficial funds that unite private investors with big sums in their hands. In general, they are ready to join projects with up to 100 million rubles.
They often consist of the people who can't invest money abroad due to sanctions, which makes them invest in Russia.
The participants of ''Commercial Realty'' session think the rehabilitation of banks led to the appearance of a big number of real estate on inventory that was used to grant loans and that banks can't manage now – there is no competence. Participation in the development and sale of such assets is another way of making money for investors.
Good offices end, while shopping malls became smaller
Moscow can face a deficit of quality offices in a year, thinks head of Construction Bank project of Russian Capital JSCB Viktor Lesnoy. The existing space is running out, Moscow City is gradually filled, while nobody has launched new big projects.
Asset Management Director of O1 Properties Pavel Barbashev also agrees with him. It's difficult to start new big projects in centres of big cities. This is why the quality of commercial centres is changing: ''There is a transition from big to local, within walking distance, from 20 to 50 square metres. We think the future will lie with this segment in the next years.''
Foreigners afraid of working in Russia
Experts are also unanimous regarding foreign investments in Russian real estate: there are no. ''Nobody is interested in us with our market. Now the market of Tbilisi is more attractive for European money than the market of Moscow. We don't expect big money from European and American markets in the next 4-5 years,'' Aleksey Mogila is convinced. Office Rental Director of PPF Real Estate Russia Nikola Obaydin agrees with him. There aren't deals even if it seems foreigners are interested in investments in Russia. The same players who ''know the rules, know how to earn and don't have a desire to go remained. But now we don't see a flow of new investors, and the situation is likely to conserve in the next several years. ''There are many talks about Eastern money, Asian money, but we don't see specific deals.''
The discussion's moderator, Director of the Department of Capital Market at CBRE Irina Ushakova asked a question whether the situation after elections would change if they were a factor that restrained investors from making decisions.
''Of course! As it's still unknown who will be the president, everybody expects who will be elected,'' Aleksey Mogila made a witty remark. ''Actually, the stability, which many people were glad about, doesn't improve the situation at all. As a country, we still become reserved and can't compete with either foreign banks or their rates.