Vladimir Yakushev: "We will monitor how the situation develops further"
Minister of Construction, Housing and Utilities of the Russian Federation Vladimir Yakushev responded to a number of questions during an interactive press briefing that took place at the International Real Estate Investment Forum PROESTATE.Live. The journalists present were interested most of all in the possibility of changes to the law. The event was organized by the Roscongress Foundation, the Ministry of Construction, Housing, and Utilities of the Russian Federation, the Academy of Real Estate (ARE) educational centre, and IMMERGITY.
10.09.2020
Responding to the questions, Yakushev remarked on the burgeoning market recovery. During the early stages of the pandemic, work at construction sites came to a halt in Moscow and Moscow Region, while restrictive measures were put in place in other regions. Those restrictions are now being lifted. Naturally, we are currently seeing a "minor recession" in the commissioning of new housing, according to the Minister.
A whole range of support measures are being made available to the sector to aid the recovery process, most notably preferential mortgage rates of 6.5% per annum. "Everybody says it's a good programme and they would like it to be extended," Yakushev said. A decision on its extension, however, has not yet been made, and it depends on a number of factors including the availability of funding. The matter is currently under discussion.
Furthermore, there is still no clear picture regarding the need to buy back housing from developers. A buyback policy was presented as a support measure for developers, but demand is now starting to recover, and there are no calls for a buyback on the part of developers. "We will monitor how the situation develops further," stated Mr. Yakushev.
The discussion also touched on the status of dilapidated housing, in the run up to the State Council's Presidium meeting on emergency housing. One thing, in Yakushev's view, is clear: new tools are needed in order to implement the resettlement programme.
Additionally, a law is currently being drafted that would give apartments the same status as other residences. Yakushev outlined the law: "The question is simple: either they are residences or they are not. If they are residences, then we recognize that apartments have been built without the specific requirements that apply to residences, whether infrastructure, car parks or courtyards. Are we ready to classify them as residences?"
According to the minister, the authorities are now inclined to recognize apartments as residential units with "certain limiting criteria".
A question on industry reforms and a possible mechanism for raising capital using escrow accounts was raised during the briefing. Yakushev responded, saying that Reform is taking place, and rather quickly. But the picture varies in different regions. In places where the authorities are taking an active role, providing a channel for communication between banks and developers, the situation is progressing. But there are regions where the banks are moving in one direction, and the developers in another. Here, representatives of the Ministry of Construction must address the situation. "When we look at how the mechanisms are functioning, things are quite good. In terms of activity, however, this is not the case everywhere. We are now working hard to correct this," said Mr. Yakushev.
The Minister also spoke about the difficulty of creating a unified state customer service under the Russian Ministry of Construction. The task at hand is to bring together the state customer services of the education, healthcare, and sport ministries, the tax service and other bodies, which is no easy feat. No decisions have been taken on appointments to the new service, though technical works and project evaluations are now underway. "We will soon be ready to announce the figures for our order portfolio," concluded Mr. Yakushev.
Journalists were also interested in the format of the Ministry's international activities. Mr. Yakushev stated that all operations have been moved online, but negotiations are continuing. Negotiation partners include Singapore, France, China, Japan, and Saudi Arabia. "You cannot see what is actually happening out there, but we are now used to it, and have started sharing photographs and video clips," said the Minister.
The Minister added that the first international business trips will begin next week, as restrictions on travel between the countries begin to be lifted.
The country's partnership with Turkey will continue: "Housing development is an area where we have common ground, whether in technical regulations, technologies, or the creation of comfortable living environments," said Mr. Yakushev. The memorandum drawn up with Turkey and which has now been put on hold will therefore be signed.
PROESTATE.Live partners: Official Partner – Mosinzhproekt; Partners – ANT Development and YugStroyImperial; Official Session Partners – A101 and Colliers International Group Inc.; Session Partner – Cushman & Wakefield.
Official website of the event: proestate.ru/en
A whole range of support measures are being made available to the sector to aid the recovery process, most notably preferential mortgage rates of 6.5% per annum. "Everybody says it's a good programme and they would like it to be extended," Yakushev said. A decision on its extension, however, has not yet been made, and it depends on a number of factors including the availability of funding. The matter is currently under discussion.
Furthermore, there is still no clear picture regarding the need to buy back housing from developers. A buyback policy was presented as a support measure for developers, but demand is now starting to recover, and there are no calls for a buyback on the part of developers. "We will monitor how the situation develops further," stated Mr. Yakushev.
The discussion also touched on the status of dilapidated housing, in the run up to the State Council's Presidium meeting on emergency housing. One thing, in Yakushev's view, is clear: new tools are needed in order to implement the resettlement programme.
Additionally, a law is currently being drafted that would give apartments the same status as other residences. Yakushev outlined the law: "The question is simple: either they are residences or they are not. If they are residences, then we recognize that apartments have been built without the specific requirements that apply to residences, whether infrastructure, car parks or courtyards. Are we ready to classify them as residences?"
According to the minister, the authorities are now inclined to recognize apartments as residential units with "certain limiting criteria".
A question on industry reforms and a possible mechanism for raising capital using escrow accounts was raised during the briefing. Yakushev responded, saying that Reform is taking place, and rather quickly. But the picture varies in different regions. In places where the authorities are taking an active role, providing a channel for communication between banks and developers, the situation is progressing. But there are regions where the banks are moving in one direction, and the developers in another. Here, representatives of the Ministry of Construction must address the situation. "When we look at how the mechanisms are functioning, things are quite good. In terms of activity, however, this is not the case everywhere. We are now working hard to correct this," said Mr. Yakushev.
The Minister also spoke about the difficulty of creating a unified state customer service under the Russian Ministry of Construction. The task at hand is to bring together the state customer services of the education, healthcare, and sport ministries, the tax service and other bodies, which is no easy feat. No decisions have been taken on appointments to the new service, though technical works and project evaluations are now underway. "We will soon be ready to announce the figures for our order portfolio," concluded Mr. Yakushev.
Journalists were also interested in the format of the Ministry's international activities. Mr. Yakushev stated that all operations have been moved online, but negotiations are continuing. Negotiation partners include Singapore, France, China, Japan, and Saudi Arabia. "You cannot see what is actually happening out there, but we are now used to it, and have started sharing photographs and video clips," said the Minister.
The Minister added that the first international business trips will begin next week, as restrictions on travel between the countries begin to be lifted.
The country's partnership with Turkey will continue: "Housing development is an area where we have common ground, whether in technical regulations, technologies, or the creation of comfortable living environments," said Mr. Yakushev. The memorandum drawn up with Turkey and which has now been put on hold will therefore be signed.
PROESTATE.Live partners: Official Partner – Mosinzhproekt; Partners – ANT Development and YugStroyImperial; Official Session Partners – A101 and Colliers International Group Inc.; Session Partner – Cushman & Wakefield.
Official website of the event: proestate.ru/en