Maxim Maramygin, Director of the USUE Institute of Finance and Law, about the possible prohibition of shared-equity construction

UralInformBureau, July 24, 2017

A number of Russian officials the other day urged to ban shared-equity construction as such. Among them, there are the head of Bashkortostan Rustem Khamitov and Krasnoyarsk Mayor Edham Akbulatov, TASS reported.

In the opinion of the opponents of the shared-equity construction, developers should build houses on funds borrowed from banks, and then sell them to buyers.

This way would mitigate risks for citizens who want to buy new-build housing to be out of money and without a roof over their heads.

Uralinformbureau decided to find out the attitude of builders, economists, politicians, and investors of the Urals to such a straight-out initiative.

Maxim Maramygin, Director of the USUE Institute of Finance and Law:

This is an extremely unreasonable statement. The ban shared-equity construction will be beneficial primarily to the banking sector: it will enable banks to increase interest on mortgage loans. Besides, this will also increase the cost of apartments, because the developer would have to take out expensive loans for the implementation of projects, pay higher interest and invest the cost of these percentages in the price of each square meter of housing. Since our government has decided to interfere with everything, let it assume control functions - to monitor the fulfillment of developer’s obligations. At present, this control has rather a declarative character.

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A number of Russian officials the other day urged to ban shared-equity construction as such. In the opinion of the opponents of the shared-equity construction, developers should build houses on funds borrowed from banks, and then sell them to buyers.