Developers in Russia's regions could go bankrupt as authorities tighten rules on preferential mortgages, State Duma deputy Svetlana Razvorotneva warned in an interview with Moskovskaya Perspektiva.
Razvorotneva, deputy chair of the Duma's committee on construction and housing and utilities, said most housing in the regions is bought by people using family mortgage loans, but the number of recipients of preferential home loans nationwide has fallen. She said this is worsening the situation for regional developers, who are already operating on the edge of profitability because of the high key interest rate, expensive credit and rising labor costs.
70 percent of housing unsold
Razvorotneva said 70 percent of housing in Russia remains unsold, and warned that the risk of bankruptcies remains very real. She said the danger has not been overcome, and that while the Ministry of Construction and the government are doing everything possible to support the construction market, the situation is strange because the state is creating the problem itself. She said the key rate raises budget costs, so the government uses one hand to pull money from the budget to compensate for what the other hand caused.
Denis Zhalnin, general director of the development company Lyudi, earlier predicted a possible shortage of compact apartments in Russia amid construction restrictions and changing buyer demand.
