The Russian housing construction market is trying to gather strength for recovery. The construction recession in the Russian Federation continues The situation on the building materials market
Legal relations arising regarding the participation of citizens in shared construction continue to be one of the most discussed topics in the legal community. The wave of bankruptcies that swept Russian developers determined the relevance of the issue under consideration.
Federal authorities, practicing lawyers and scientists are trying to work together to solve the problem of the existence of “defrauded shareholders” or at least stop the rapid growth of their number. In this regard, the legislation on shared construction regularly undergoes certain changes.
If we analyze the nuances of construction activity, we can conclude that this area is most vulnerable during the crisis stages of the economic cycle. The rapid rise in prices for construction materials leads to a shortage of working capital, and attracting new lenders in a crisis can be an overwhelming task even for large construction companies. Ultimately, the developer is declared bankrupt, and the fulfillment of the obligations assigned to him is often postponed indefinitely.
Various resources today help monitor the situation in the sphere of legal relations arising regarding the participation of citizens in shared-equity construction. Statistical data is constantly being received from official and unofficial sources and is immediately made available to the public.
The full criticality of the situation can only be realized by comparing RASK statistics given in different periods of 2016. Thus, in August 2016, there were 61 bankrupt companies across the country. In January 2017, statistics for the past year were updated: already 149 companies are in one of the stages of bankruptcy. It only took the industry about six months for the number of bankruptcies to increase 2.5 times! The situation with contractors also aggravates the situation. The same RASK reports that out of 151 thousand unique companies in 2016, 3,183 contractor companies entered one of the stages of bankruptcy.
As we see, the problems in the field of shared-equity construction are quite serious. Attempts to solve them are being made by changing legislation. However, the nature of the changes being introduced can hardly be called favorable for developers, since the main goal of the legislator’s activities remains the protection of the rights of defrauded shareholders.
The leitmotif of the amendments made to 214-FZ on shared-equity construction was the tightening of requirements for developers. It was initiated mainly by the Moscow region authorities, since the situation with participation in shared construction in this region caused the greatest concern. The regional governor has repeatedly said that many companies “collect money from shareholders without having a penny to their name.” By saying this, Andrey Vorobyov meant 90% of developers. With such statistics one could not expect the legislator's loyalty.
And, indeed, the requirements for the financial stability of developers have increased. True, some of them will come into force on July 1, 2017. These include, in particular, the requirement for the size of the authorized capital, which by law must vary from 2.5 million to 1.5 billion rubles. The gradation depends on the maximum area of all shared construction projects of the developer himself and the legal entities associated with him (Part 2.1 of Article 3 of the updated edition of 214-FZ).
The assessment of this novelty in the legal community is ambiguous. It is known from practice that situations are common when the authorized capital of construction companies raising funds from citizens does not exceed 50 thousand rubles. Of course, such companies are small and their participation in legal relations regarding shared construction is doubtful. Obviously, in connection with these legislative innovations, we should expect a sharp reduction in the number of construction organizations, possibly due to the absorption of smaller ones by large companies. Accordingly, only a few market players will compete with each other.
At the same time, the law left a small loophole for small and medium-sized businesses. You can bypass the requirement for the amount of authorized capital by concluding guarantee agreements with one or more legal entities that meet the requirements set for the developer. Such an agreement is subject to notarization and is concluded before the state registration of the first DDU. (Article 15.3 of the new edition). Enforcing the obligations of construction companies “at risk” is indeed a necessary and rational move by the legislator. In particular, this provision should have a positive impact on the practice of collecting mandatory payments from companies.
Among the changes introduced, information about the creation of a compensation fund for housing construction received a great public response. However, the legal community does not place great hopes on the newly created institution due to the failure of the once introduced institution of civil liability insurance for developers. The creation of a compensation fund is a new approach that has not previously been used in the field of shared construction. The tense situation in society predetermined the social orientation of the initiative: the rules of the game are changing again for developers.
It is important that the changes will apply only to citizens who entered into a DDU after the act came into force. If at least one DDU is sold and insured with any insurance company before the start of the fund’s activities, then this house and its further DDUs are insured with the same insurance company. The formation of the fund's monetary base will be carried out through contributions from developers, which will amount to 1% of the cost of construction of the property specified in the project declaration.
What can we expect in the near future in light of the changes introduced? You definitely shouldn’t expect a sharp rise in prices for primary real estate: additional financial burdens on developers are unlikely to lead to this. The solvency of the population remains low, and therefore there are virtually no prerequisites for rising prices. There will be fewer developers, as entering the market is difficult. Of course, the reliability of venerable developers is more important than the variety of offers. The main thing is that the reduction in competition does not affect the quality of the facilities being built.
As for the activities of the compensation fund, against the backdrop of failed liability insurance, this initiative looks more promising. But, of course, the main thing in this matter is the performance of the mechanism. If citizens actually manage to get their money back when the developer is declared bankrupt, the effectiveness of the reform will not raise any doubts.
The driver of growth was the segment of finishing materials, while in the segment of building materials, as in the previous year, there was a decline.
According to the study “DIY Market of the Russian Federation. Results of 2017. Trends 2018. Forecast until 2020", prepared by INFOLine specialists, in 2017 the retail market of construction (Hard DIY) and finishing materials (Soft DIY), goods for the home (Household) and garden (Garden) grew by 1.8%, and in the first half of the year the dynamics were negative, however, starting from the summer, increased consumer activity had a positive impact on the market. The driver of growth was the segment of finishing materials, while in the segment of building materials, as in the previous year, there was a decline.
There was positive dynamics in the DIY market, despite the fact that in 2017, 2.1% less residential real estate was commissioned in Russia than a year earlier, and the majority of the commissioned premises (56.4%) were economy class housing - 44.4 million sq. m. For the first time at the end of the year, more than 50% of housing is purchased with a mortgage, which strengthens the trend of sales of furnished housing. Repairs from the developer, depending on the type and class of housing, are 15-40% cheaper than independent ones, and can be financed with a mortgage loan. For 2014-2017 The share of furnished apartments in the sales volume of new buildings (primarily in the mass segment) increased from 6% to 26% within Old Moscow, from 5% to 46% in New Moscow, from 20% to 60% in St. Petersburg. In general, in Russia in 2018, the sale of new apartments with finishing will exceed 35%.
The key trends in the DIY market in 2017 were the ongoing consolidation and weakening of the positions of regional chains against the backdrop of a sharp increase in price competition and growth in marketing and advertising expenses of the largest retailers, as well as the development of online and omnichannel sales. Buyers continued to adhere to the model of rational consumption: they more often compared the cost of goods on the Internet and in stores, actively responded to special offers and increased the share of chains’ own brands in their receipts.
Similar studies
Article, October 24, 2019 BusinesStat Three quarters of all imports of children's toys come to Russia from China.
Belarus is in second place in the import of toys.
According to the review “Export and import of children’s toys in Russia in 2018”, prepared by BusinesStat in 2019, in 2018 the largest natural volume of children's toys was supplied to Russia from China - 122.8 thousand tons, or 74.6% of the total import volume. In second place among the countries was Belarus, which supplied 19.5 thousand tons of products to Russia, or 11.9% of the total domestic imports; Kazakhstan was in third place - 2.6% or 4.3 thousand tons.
The monthly volume of construction work in Russia is still declining, but according to forecasts in the coming 2017, this decline will definitely slow down. The fact that this is not a temporary trend is also evidenced by the fact that the “bottom” of the crisis is behind us and the situation will stabilize in the next two years.
Housing construction
According to IndexBox, the housing construction market in 2017 will develop under the influence of the following factors: a slight reduction in residential construction volumes (-1.5%) and small growth in the non-residential segment (+6%). It is important to understand that in 2016, the decline in both segments reached 16–20%, with a predicted 25%. That is, the actual drop was not as large as expected. Therefore, the expected decline in the real estate segment of 1.5% may in fact turn out to be an insignificant increase. In addition, the real estate market will be affected by a decrease in the volume of investments, including foreign ones.
According to experts, the real estate market is very inertial: two years are expected between the peak of the crisis and smooth development. Developers remember with pain in their hearts December 2015, when the primary housing market experienced an increase due to a currency shock: citizens who had available funds invested them in purchasing apartments. Today, most housing construction is carried out at the stage of constructing the upper floors. Having experienced a record volume of housing commissioning in 2015 and stagnation in 2016,
the market will have to pull back in 2017 before making a breakthrough. Over the past two years, the state has provided the construction market with a “crutch” - a low interest rate for the purchase of housing under construction. Taking into account the fact that they plan to take away the “crutch” by 2017, a small rollback under such conditions can be considered almost an increase.
It is assumed that without government support, the market will move at the expense of buyers who plan to buy apartments without attracting additional mortgage funds.
Almost half of investments in Russia are related to the construction segment, while during periods of crisis the share of investments in construction grows
How about without a mortgage?
After lengthy discussions at the federal level, it was decided that mortgage subsidies do not need to be extended. But! By the end of 2016, rates began to gradually decrease without “crutches” - thanks to the reduction of the Central Bank’s key rate to 10% per annum.
According to the AHML analytical center, currently the average rate under the subsidy program is 11.42%. At the same time, the average rate for new buildings without state support is 12.9, for secondary housing – 13.1%. Experts explain the recent reduction in rates by increased competition between banks and the improvement of their financial products by key players in this segment. The rate cut in October set a general trend for the entire market, and it will only intensify in the coming 2017. In addition to lowering interest rates, banks together with developers have developed special programs - they will support the construction market next year.
Rates are expected to return to 2014 levels, when they averaged 12 to 13% nationally. The prerequisites for a larger reduction are also visible - for this, a sufficient reason would be for the Central Bank to reduce the rate by another half a percent. AHML also expects a further reduction: as the Bank of Russia reaches the inflation target of 4%, mortgage rates will continue to decline and by the end of next year could reach a level of 11–11.5%. According to forecasts, mortgage loan rates will drop below 10% as early as 2018. However, the agency does not exclude that at the beginning of 2017, a slight increase in rates and their rollback is still possible. Both banks and developers are already aware of this temporary surge. Most likely, they will be offered a “compensation mechanism” in the form of promotions and special offers.
Popularization of mortgages is one of the government's tasks. This was stated by Vladimir Putin, summing up the results of the year in the construction sector. The President emphasized that rates on mortgage loans cannot be lower than the key rate of the Central Bank of the Russian Federation, however, Russia has preferential mortgages, and the government will strive to spread the practice of supporting certain categories of borrowers
In addition, the popularization of mortgages is one of the government’s tasks. This was stated by Vladimir Putin, summing up the results of the year in the construction sector. The President emphasized that rates on mortgage loans cannot be lower than the key rate of the Central Bank of the Russian Federation, however, Russia has preferential mortgages, and the government will strive to spread the practice of supporting certain categories of borrowers.
The President emphasized that currently the average mortgage rate in Russia is 12.5%, but for beneficiaries it can be reduced to 10.5%, and in some regions - even lower than this level. “The practice of providing support to certain categories of citizens purchasing housing on credit will continue to spread in the future,” Vladimir Vladimirovich emphasized. He also promised to develop a system of rental and service housing in the country.
Non-residential construction
At the end of 2016, the volume of commissioned non-residential buildings increased by 3%. This sets the trend for 2017, in which the share of agricultural and commercial buildings will increase. If after the 2008 crisis there was a shortage of retail and office space on the market, then in 2017 this demand was fully satisfied, so part of the resources went into the industrial buildings segment, which is generally positive for further economic growth. This was also facilitated by counter-sanctions: they created the conditions for the development of agriculture. The construction of social facilities is showing a decline, this is due to budget cuts.
If after the 2008 crisis there was a shortage of retail and office space on the market, then in 2017 this demand was fully satisfied, so part of the resources went into the segment
industrial buildings, which is generally positive for further economic growth. This was also facilitated by counter-sanctions
Almost half of investments in Russia are related to the construction segment, while during crisis periods the share of investments in construction grows. In 2015–16, almost 12 billion rubles were invested in this segment, which is half of all investments in fixed assets during the same period. It is expected that in 2017 this dynamics will intensify and investments in the fixed capital segment will reach 2/3. On average, investment growth will be 3.8% per year. However, the simultaneous reduction in spending in the public sector in 2017 will reach 23% and will negatively affect the attraction of large investment funds.
According to economists’ forecasts, in the coming years, starting from 2017, the structure of investments in the Russian economy will change, while about a quarter of the invested funds will be spent on construction. In fact, by 2019, the construction industry is expected to recover to 2014 levels: both demand and supply. And 2017 will be a turning point in this story.
The material uses data from www.indexbox.ru, www.dom.rf, AHML, http://www.sberbank.ru
NB-HELP
JSC Agency for Housing Mortgage Lending (AHML) - created by decision of the government of the Russian Federation, 100% of the shares of AHML belong to
To the Government of the Russian Federation represented by the Federal Agency for State Property Management.
In 2015, a unified development institute in the housing sector was created on the basis of AHML. It included subsidiaries of AHML: OJSC AFZhS, OFO SK AHML and the Fund for Assistance to the Development of Housing Construction (RHD Fund).
On September 1, 2016, the RHD Foundation was liquidated, its functions were transferred to the Unified Institute for Development in the Housing Sphere.
Among the tasks of the Unified Institute for Development in Housing
sphere, reducing risks in the housing and mortgage market, stimulating the construction of affordable housing, developing mechanisms for financing engineering infrastructure, implementing anti-crisis support measures in the housing and mortgage market. In addition, its tasks include developing the rental housing market by attracting collective investments and comprehensive improvement of the urban environment.
Photo: © Stockcentral / Bigstockphoto
The monthly volume of construction work in Russia continues to decline. However, the scale of the decline compared to the same period of the previous year becomes smaller every month. Perhaps the situation will stabilize in the coming months. However, it is still too early to talk about the end of the crisis.
According to IndexBox, the market for construction and finishing materials in January - May 2016 developed under the influence of the following trends:
Reduction in residential construction volumes (-16.1% y/y);
Slight growth in non-residential construction volumes (+3% y/y);
Decrease in the production of construction raw materials and production of basic building materials (-4.3% and -8%, respectively);
Growth in production volumes of finishing materials (+5.3%);
Decrease in investment in construction by 1.6% from the 2015 level.
What's happening with the construction site now?
Housing construction
The real estate market is very inertial. A year or more may pass between crisis events and their consequences. According to developers, the last peak in sales on the primary housing market occurred in December 2014, when, with the onset of the currency shock, citizens who had available funds invested them in purchasing apartments. Already in the first months of 2015, sales fell by 30 - 35% and now remain at approximately the same level.
Most housing in Russia is sold at the stage of construction of the upper floors, but before the official commissioning of the object according to the documents. The record housing commissioning in 2015 (85.3 million sq. m., + 1.4% y/y) is due to the fact that throughout the year, but mainly in the first months, the market absorbed funds that had arrived earlier. The decline began in June 2015. Construction showed the worst values in February of this year (-23% y/y), then in March and April the decline slowed down somewhat, amounting to -14% and -6%, respectively. Just 1 sq. In 2016, 15.6 million sq. m. were built. m of housing (-16.1% y/y).
The decline in sales occurred mainly due to individuals who bought apartments with personal savings, without attracting any additional funds. During the current crisis, their share has decreased from 65% to 55%. Against this background, the state is making the maximum available efforts to stimulate the housing market, including in order to keep banks and the construction complex afloat. I found useful information on the Internet about the newest slot machines.
Thus, when purchasing an apartment within the framework of the subprogram “Providing housing for young families” of the federal target program “Housing” for 2015 - 2020, a subsidy of at least 30% of the estimated cost of housing is provided. In February it was extended until the end of this year. At the same time, there is a Mortgage Loan Rate Subsidy Program under which the preferential rate should not exceed 12%. During the period from March to December 2015, 211 thousand loans were issued under the Program in the amount of 374 billion rubles. (35% and 37%, respectively, of the total number and volume of all ruble mortgage loans). Taking into account the supply chain, these measures indirectly keep demand for construction and finishing materials from falling deeply.
In the consumer retail segment related to finishing and building materials, the situation is now a little better. The number of issued consumer loans, which include loans for minor repairs, decreased by 31% y/y in January - May 2016, real incomes of the population fell by 4.7% y/y. Against the backdrop of inflation, the average purchase size is decreasing, and interest in cheap materials, including domestic ones, is growing.
Non-residential construction
Based on the results of the 1st quarter. In 2016, the volume of commissioned non-residential buildings increased by 3% YoY and amounted to 4.8 million sq. m. m. Compared to 1 sq. 2015, the share of agricultural and industrial buildings increased (up to 26.5% and 14.3%, respectively), the share of commercial buildings decreased to 32.7%.
In our opinion, these are the first signs of profound shifts. If in the 2000s and after the 2009 crisis the market experienced some shortage of retail and office space, now the demand has already been largely satisfied and, apparently, there will be no growth in this segment for a long time. The decline in the construction of social facilities is associated with budget spending cuts. On the contrary, counter-sanctions created conditions for the development of agriculture. As will be shown below, in the medium term there may be a slight recovery in the industrial construction sector and sales of materials for the b2b segment.
Investments
In Russia, almost 2/3 of investments in fixed assets are associated with the construction industry, and during periods of crisis, the share of construction in investments grows. In 2015, 5,945.5 billion rubles were invested directly in construction, which is 40.8% of all investments in fixed capital for the same period.
Investments and the volume of construction work have been experiencing negative dynamics since mid-2012, with investment activity currently concentrated mainly in the housing construction sector. According to the forecasts of the Ministry of Economic Development, the dynamics of investment in fixed capital will return to the positive area in 2017, and on average the increase in investment in 2017 - 2019. will be 2.7% per year. However, at the same time there will be a significant reduction in public sector expenditures, primarily among federal authorities. Already in 2016, the volume of FAIP expenditures decreased by 23% to 860 billion rubles, with ¼ of their amount being defense expenditures, which have relatively little connection with the rest of the economy.
Another important feature of the “new normal” is the refusal of organizations to attract large credit funds. As experts expect, the share of investments by non-financial organizations from their own funds in 2017 - 2019 will exceed 50%. The sensitivity of investment projects to the profitability and payback periods of real production is increasing. As a result, the non-residential construction and engineering market faces demand for few and inexpensive objects intended for long-term use.
The situation on the building materials market
According to economists' forecasts, the structure of investments in the Russian economy will change minimally in the coming years - a little more than 21% of the annual volume of invested funds will be spent on the construction of real estate, but their volume in 2016 - 2017 will be will be significantly reduced. As a result, even in 2019, after the expected resumption of economic growth, money in the construction industry, net of inflation, will be 10% less than in the “fat” 2014 (see figure).
Construction materials are classified as investment goods, that is, the demand for them is associated with the construction and repair of facilities. The table below summarizes data on the dynamics of production of the most important goods used in construction, which we divided into the following groups:
Construction raw materials;
Basic building materials;
Decoration Materials.
During the period from January to May 2016, the production of construction raw materials (-4.3% y/y) and basic building materials (-8%) decreased. The production of cheap sand-lime brick (-40.5% y/y), reinforced concrete products (-20%), cement (-13.7%) and ceramic brick (-13.5%), that is, materials used during the construction of walls, bridge supports and load-bearing structures. At the same time, the production of paving slabs (+5.4%)), used in landscaping, and tiles (+19.6), often purchased for repair purposes rather than construction, is growing. While the production of flat glass (+5%) and parquet (+1.9%) is growing, in the first case the profitability of the products is not fully clear.
In January - May 2016, an increase in the production of finishing materials (+5.7%), actively used in repair work, was recorded. There was a significant increase in production volumes of paints and varnishes (+23.3% y/y) and wallpaper (+19.5%). In our opinion, as in the case of parquet, it is caused by a reorientation of demand from more expensive imported products to Russian ones.
It should be noted that capacity utilization at enterprises in the construction materials industry at the end of 2015 was only 50 - 60% due to lack of demand; previously it was at the level of 70% and above.
We predict the following developments in the construction and finishing materials market:
1. end consumers (retail sales of building materials) remain an attractive segment for manufacturers of building materials - renovation of apartments and countryside real estate is carried out by the population almost constantly, including on their own, and does not require the mobilization of such large funds as the purchase of housing;
2. devaluation of the ruble will have a negative impact on the development of the industry: due to the lack of a machine-building base for the construction materials industry, there will be a significant increase in the cost of purchased imported equipment and technologies;
3. The worst year for the residential real estate market will be 2017, since by this time the current shortage of new projects on the market will begin to affect;
4. however, it is at this time that the demand for building materials will gradually begin to recover, and somewhat earlier - in the capacious markets of brick, sand and cement;
5. demand for all groups of construction and finishing materials from the public sector will be reduced by at least 20%.
At the same time, at the moment it is not yet completely clear what the mechanisms for the country’s exit from the current situation of cessation of growth will be.
How will the domestic economy behave in the coming year? Perhaps unpredictable...
Another crisis year is coming to an end. What will 2017 be like? Opinions vary. Some believe that recovery growth will begin, others believe that economic stagnation will continue. With the help of experts, we will try to figure out what awaits us.
Optimists from abroad
This may surprise some, but foreign organizations are optimistic about the Russian economy: they predict growth ranging from 0.5 to 1.5%.
Experts from the World Bank are most optimistic: according to their estimates, it will grow by 1.5%. This will happen, first of all, due to increased consumer activity, lower inflation and increased investment, according to global bankers.
The Organization for Economic Co-operation and Development is more pessimistic: OECD experts predict growth of just half a percent. The factors are approximately the same: increased consumer demand and investment.
The IMF forecast is plus 1.1%. This result should be influenced by increased consumer demand, improved domestic financing conditions and stabilization of oil prices.
Standard & Poor's forecast for 2017 is plus 1.4% of GDP. S&P analysts find three positive factors: a moderate rise in oil prices, an increase in its production and an increase in household consumption.
Moody’s also made a generous forecast: it “gave” 1.5% growth to the Russian economy. According to its analysts, no new external shocks are expected, investments will grow, the quality of assets in the banking system will improve, and the import substitution policy will bear fruit.
However, the prospects for the economy and domestic structures are positive. Thus, the Ministry of Economic Development of the Russian Federation believes that it will grow by a modest 0.8%. According to department officials, this joyful event will happen due to increased exports and increased reserves.
In the Bank of Russia’s base scenario, economic growth fluctuates in the range of 0.5-1%. In many ways, the Central Bank attributes this future merit to itself, pointing out that this result can be achieved through its successfully pursued monetary policy. The Central Bank also hopes for increased consumption and investment activity.
Deep structural crisis
Independent Russian experts have a much more pessimistic view. For example, director of the FBK Institute for Strategic Analysis Igor Nikolaev, that the analysis carried out by the organization he heads allows us to conclude: in 2017, GDP will not grow, but will decrease by 1%.
There are a number of reasons for this pessimism. The decline in real incomes of the population continues, which makes consumption growth unrealistic. Negative dynamics of investment in fixed capital continues - it is associated with an uncertain economic and geopolitical situation.
According to FBK analysts, hopes for an increase in oil prices are unfounded: the super cycle of high prices has ended, and there are no factors indicating a reverse trend. The sanctions, which are unlikely to be lifted in 2017, make it difficult for Russian companies to access the market for cheap foreign financing. If so, then there is no reason to hope for economic growth.
But this is rather a superficial layer of events. Meanwhile, they also have a deeper subtext. A deep structural crisis remains in Russia. High oil prices made it possible to neutralize its impact, but with low prices for raw materials, the question inevitably arises: is growth possible in principle?
The structural crisis is caused not only by the Soviet legacy, but also by other reasons. Igor Nikolaev lists the main ones: incorrect economic and social policies of the last period, delays in overdue reforms, the raw material nature of the economy, the low share of small and medium-sized businesses.
Without structural changes there is no hope for change. But the government does not call overcoming structural imbalances the main task of economic policy.
“With a structural imbalance, the economy adapts to the situation; in some cases, some growth is even possible, but it is not able to get out of the crisis,” summarizes Igor Nikolaev.
Medium Development Trap
Deputy Chairman of the Board of VEB is also pessimistic about the future Sergey Vasiliev. In his opinion, we expect stagnation for a period of 3-5 years. You can’t get out of it without growing investment, so you have to think about where to get it. But so far the authorities have not shown any positive thoughts on this matter.
In order for investments to appear, an adequate financial system must be built in the country, Mr. Vasiliev reminds. There is a lot of money in the economy, but there are not enough effective mechanisms for converting it into capital investments. Banks are engaged primarily in short-term lending, non-state pension funds are blocked by recent decisions.
However, there is hope that with a decrease in inflation, investments by companies themselves will increase. But if there is no capital flow, then the opportunities for investment growth will be very limited.
And Russia’s investments are urgently needed to overcome the medium development trap into which the country has fallen. Its essence is that the transition from traditional industrial development to innovative development is ripe, which will inevitably be followed by an increase in labor productivity.
This development is accompanied by an intensive flow of labor and an increase in the range of goods produced, primarily innovative ones.
According to Sergei Vasiliev, it is wrong to say that the government does not understand this challenge - it is making efforts to create a new economy. But in the best case scenario, results can be expected no earlier than four years later.
Vibrant economy
The most amazing thing about the Russian economy is its vitality, says the head of the Center for Economic Policy Research at the Faculty of Economics of Moscow State University. Oleg Buklemishev. No matter what you do with it, it adapts to its environment. This is happening primarily due to the small and medium-sized business sector.
And this is not the first time this has happened. After the 1999 default, the IMF predicted a 10 percent contraction. And the economy began to grow. Then the government Primakova-Maslyukova nothing began to break, and the business believed in its prospects.
The current government, according to an expert from Moscow State University, is purposefully ruining the economy.
“The economy has reached the limits of its development,” the economist emphasizes. — And the part of it that can be called live rests on government policy: freezing pension savings, high lending rates. As a result, there is no long-term money.
As currently constructed, the economy has passed its peak. Even achieving two percent growth requires major changes.
“In general, it’s time for us to understand that in the current conditions, forecasts about whether the economy will grow a little or fall a little make no sense,” the former Russian Minister of Economy is convinced Andrey Nechaev. — The goal is to achieve at least 4 percent growth. It is real, but only with the implementation of a large reform program.
New reality of the construction complex
The construction industry is of particular importance to the economy. Almost two-thirds of our investments in fixed assets are related to construction. However, funding sources will change. Experts expect that the value of own funds will increase due to a decrease in the attraction of credit sources. The importance of such factors as profitability and payback periods of projects will greatly increase.
In the housing construction sector, demand is the deciding factor. And it largely depends on the state of mortgage lending. According to the General Director of AHML Alexandra Plutnik, there are large reserves for lowering interest rates. In our country, only 20-25% of the total loan amount goes to builders - the rest ends up in the pockets of intermediaries.
Meanwhile, mortgage lending is a huge reserve for the development of the construction industry. Since 2004, mortgages have increased 22 times! No other segment of the country's economy has demonstrated similar results.
But it is very important to achieve a reduction in interest rates, emphasizes Alexander Plutnik. Each point of their reduction increases the number of potential borrowers. By the end of 2017, the average loan fee may drop to 10%. And at a rate of 9%, in a few years the annual housing commissioning can reach 100 million square meters. m.
Much here depends on the Central Bank, on whether the regulator will be able to cope with inflation and lower the key rate. But it is no less important to improve the mechanism for providing loans: this process must be freed from unnecessary intermediaries.
At the same time, the economy as a whole remains in an uncertain state. As Igor Nikolaev summarizes, hopes for a revival of consumer and investment demand are based, rather, on the desire for this to happen, rather than on objective preconditions. And given all the imbalances in the Russian economy, with relatively low oil prices and the persistence of sanctions, a transition to growth, alas, cannot be expected.
It seems that everything is logical and correct. But let us remember that the economy often behaves in a way that none of the analysts predicted. She has such an unpredictable character.
Vladimir GURVICH