Every house is held in escrow – Kommersant FM

Building your own home may become more expensive, but safer. The Ministry of Construction has developed a bill according to which payment for the services of private contractors will be made through escrow accounts. The government recently approved the document. As Kommersant FM’s interlocutors note, formally this will make the individual housing construction market more transparent. But many contractors, within the framework of the escrow account mechanism, will be forced to attract credit funds at high rates, which will ultimately be passed on to customers. The topic will be continued by Vladislav Viktorov.

The demand for private houses in Russia has grown sharply during the pandemic. Since then, interest in them has remained high, although the end of 2022 has significantly spoiled the statistics. The market began to revive last spring and at the end of the second quarter grew by 8%, as calculated by Avito Real Estate.

As a rule, Russians engage private contractors to build such houses, but not all players can guarantee high-quality work. The Ministry of Construction’s idea of ​​escrow accounts should solve this problem. If the bill is adopted, the money for construction will be recorded in a special account, and the contractor will receive it only after the completion of the project. This system is now in effect for the construction of apartment buildings. It is quite logical to transfer the practice to private housing, says Konstantin Barsukov, general director of the Relight Real Estate company:

“In fact, the volume of housing commissioning for 2022 is 102 million square meters. m. Of these, 45 million sq. m – apartment buildings, and 57 million sq. m – individual housing construction. In 2023, for example, from January to September individual housing construction is 48 million square meters. m, apartment buildings – 31.6 million sq. m. m. Of course, there is now more construction of individual housing construction, so developers have begun to closely look in this direction.”

But the Ministry of Construction’s bill contains a clause: escrow accounts will be used only if the contractor uses standard designs or house kits made from domestic building materials. In theory, this should solve the problem when, as construction progresses, the estimate constantly increases due to additional purchases.

In addition, some experts believe that this will also reduce prices by 10-20%. But Artem Tsogoev, a member of the board of directors of the Simple Estate investment platform, is pessimistic: “We must not forget that project financing from banks will cost money, as will servicing an escrow account.

Accordingly, if we are talking about the cost of suburban housing, then it will rise in price by about 7-10%, but it will be more reliable.”

There is a risk that loan funds for the implementation of suburban projects will be much more expensive than for apartment buildings. The problem is that banks do not have uniform criteria for evaluating private real estate. Therefore, all possible risks will be transferred to clients, says AIM owner Ilya Menzhunov:

“The valuation policy and methodology is very complex, and banks have been faced with this for quite a long time, when there was a whole boom in incorrect valuations, and when loans were taken out against them and were not repaid. Then many financial organizations had to create entire divisions for managing non-core assets.

Now it will be a rigorous evaluation process, and ultimately everything will fall on the shoulders of the buyers. And the question is: will these products be able to be liquid in the market in relation to those that do not use leverage?”

By the way, the share of mortgages for the purchase and construction of private houses is already approximately 15%, as calculated by Dom.RF. And this is the fastest growing segment of home loans. The trend is largely explained by the fact that it is possible to get a mortgage with government support. However, the favorable rates will only be available until next July.

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Andrey Zagorsky