Putin recognized the existence of problems with the transition of developers to escrow accounts, but called the reform of the inevitable

The rejection of shared construction and the transition from July 2019 to the system of project financing of housing construction using escrow accounts is associated with many problems, but will be completed. This was stated on February 12 by Russian President Vladimir Putin at a meeting with the public of Tatarstan dedicated to the national project "Housing and the City Environment".

According to Vedomosti , the president admitted that the reform would cause “certain shifts” in the market, however, according to Putin, the transition to a civilized banking system of settlements is necessary to prevent the emergence of new deceived equity holders.

“In order to adjust it (sphere of housing construction), we are forced to make decisions that formally limit the work in this sector of the economy,” Putin said, admitting that the new financing scheme can lead to an increase in housing prices.

During the meeting, the representative of the developers asked the president to “make a flexible decision” regarding those construction projects that would be launched until July 1, 2019, when developers will be required to switch to project financing.

In response, Putin recalled that until March 1, the government should decide on criteria , compliance with which will allow developers to complete construction according to the old rules.

“But I would like to say that we will still have to switch to a new system. And these possible exceptions for projects that have already been launched, there should be no illusions that they will be eternal,” the president emphasized.

Recall that the abandonment of the current scheme of shared financing provides that when buying an apartment in a new building and concluding a shared participation agreement, the shareholder transfers money not to the developer, but to the bank, and the financial organization blocks these funds before the completion of construction. The developer can get this money only after delivery of the house. This innovation should protect buyers investing in the future house at the stage of the pit. Developers will receive funds for housing construction as part of project financing in the form of bank loans.

At the end of last year, Vladimir Putin signed a bill that amended the previously adopted law on the abolition of shared construction. If the previous version of the law stipulated that the transition to the mandatory use by developers of escrow accounts from July 1, 2019 will only affect the projects launched after this date, then the updated version states that this requirement applies to previously launched projects.

These amendments became a reaction to the actions of developers in Moscow, the Moscow Region and St. Petersburg, which began to massively obtain permits for the construction of new projects for the future. In particular, Moskomstroyinvest reported that in the first half of 2018 twice as many applications were approved for an opinion on the conformity of the project declaration than in 2017. Representatives of the industry warned that tightening requirements will lead to an increase in housing prices in new buildings by 20%. According to the forecast of Deputy Prime Minister Vitaly Mutko, the increase in real estate prices when switching to project financing of housing construction will be at least 8%.

According to the state -owned company "Dom.rf", in Russia now approximately 30% of the projects are in the "red zone" for creditworthiness. This assessment generally coincides with the assessment of analysts from the consulting company Ernst & Young.