Analyzing the natural changes in the construction market and the forced transition to a model where developers must bear the lion’s share of capital investments themselves, the company head states:
“With us, everything always depends on sentiment. The Ukrainian investment and construction model differs significantly from the Western one, where people work with raised funds. Over there, developers have various options — going to a bank to get money at 5%, or to non-banking, insurance institutions, or pension funds. Until 2022, Ukrainian developers operated with their own equity and, to a large extent, funds from the general public. And that was an understandable model. Now, the proportion has shifted significantly. While before 2022, 10% of the resources belonged to the developer and 90% came from the public, today you invest up to 60% of your own money into projects and only after that can you attract funds. This directly demonstrates the shift in buyer sentiment.”
Outlining the critical barriers in designing new government concepts, Oleksiy Koval emphasizes that launching social initiatives is impossible without reciprocal support for business:
“During the presentation of the new social housing program concept at the Cabinet of Ministers, we had a debate with government officials who included escrow accounts for home buyers in the concept, but failed to provide project lending for developers. We ask: you want to set ambitious goals before us, and you ask if we can build — but where in the program are affordable loans for business? This task cannot be accomplished without the right tools.”
Speaking about the evolutionary development of the financial system in construction and the necessity of introducing civilized rules of the game, Oleksiy Koval concludes:
“I believe this is a natural evolutionary process, and we will get there. Although right now, there is a high probability that the market will first be mandated to use escrow accounts, and then, once everything comes to a standstill (because resources are in severe deficit), government officials will realize something is wrong, hear the cry of business, and provide project financing. Currently, there isn’t a developer who would say they aren’t ready to operate ‘100% above board’. We have long been ready and are working transparently. Give us balanced regulation, transparent rules of the game, access to loans — and we are ready to implement all assigned tasks, of any scale and complexity.”
Read the full interview via the link.
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