Developers were offered to significantly increase subsidies

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Developers in Russia were offered to increase state aid. The maximum cost of housing construction projects that can receive subsidies was proposed to be increased from 500 million to 2 billion rubles. Experts of the public council at the department gathered to apply to the Ministry of Construction with such an initiative (Izvestia has the document).

The share of housing that is being built using escrow accounts in the total volume of construction is now about 50%. Despite this, there are still regions where there are still no such projects, Andrey Kolochinsky, managing partner of VectorStroyFinance, told Izvestia. We are talking about entities where the developers’ margin is 5-10%. It is impossible to obtain project financing with such an indicator, he noted.

In April 2020, President Vladimir Putin instructed the government to develop mechanisms to subsidize the interest rate on developer loans. The program began operating in 2021, at the beginning of April, the first housing construction projects were identified, which will receive assistance. The measure applies to regions where the average income of the population for the first quarter of 2020 is 15% or more percent lower than the average per capita in the country as a whole. Subsidies can be received by projects with a margin of less than 15% and a total cost of no more than 500 million rubles, said Rifat Garipov, head of the commission for project financing of the public council under the Ministry of Construction.

“We propose to increase the marginal cost of housing construction projects that can participate in the subsidy program, from 500 million to 2 billion rubles, and, possibly, completely cancel this bar. For cities where most of the projects are focused with margins below 15% and high construction costs, these measures can become a driver of growth and significantly increase its volume, “Rifat Garipov told Izvestia.

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