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25/11/19

Five new super service prototypes introduced

Prototypes of super services appeared on the government services portal


22/11/19

In 2021, entrepreneurs may pay premiums of almost 11%

Now in the Tax Code of the Russian Federation the sizes of fixed insurance premiums for individual entrepreneurs are established until 2020 inclusively.


22/11/19

Information on the average number of employees will be included in the calculation of contributions

A bill has been submitted to the State Duma, which proposes to adjust the procedure for submitting information on the average number of employees. 


Expert: The Real Estate Market of Latvia is Sick

Using medicine terminology, we can say that the Latvian real estate market is currently sick. It will recover only when all transactions will be concluded at fair market value, and those whose expectations are too high, will leave. Such an opinion has Igor Danilevich, the real estate market expert, member of the Latvian Association of Real Estate, Member of the Board of LLC Real Estate Jurmala.

According to him, the market and those who work on it, need to accept this diagnosis, call a spade a spade and endure in order to return with new strength and experience.

The expert identified the main problems which impede the healthy development of the market: the wrong relationship between the client and the agent, random pricing, inaccurate segmentation of real estate, as well as the absence of normal partnership relations between agents.

Danilevich points out that it is unclear what is now the local real estate market - whether it is a buyer's or a seller's market. Owners of projects, setting out the price, do not always fully understand what are the true needs of the final consumer. For his part, the buyer cannot find a suitable offer for himself, however, there are a lot of offers on the market. As an example, Danilevich mentions Jurmala, where a large number of apartments were built during the boom (now approximately 700 apartments are exhibited on the market of Jurmala) and the developers have not thought about, what actually the buyer wants.

“Nothing shall be created artificially”, emphasizes I. Danilevich. What is the use to grow of 10 tons of potatoes, if the market is selling only 5 tons? Already, construction is carried out to such an extent that it will not be sold even within five years. Statistics shows that our population lags behind the European average size of housing, but we must understand that many people do not buy real estate because they cannot be market participants for various reasons. Instead, it stimulates the development of the rental. The share of gray sector on the rental market, I think, still prevails because the SRS mash together all economic entities, and people are afraid of excessive bureaucracy.

The expert outlined the problem - housing built in the early 2000s, which is still standing and waiting for a buyer, already outdated both morally and physically, it needs investments again to put in order and turn it into a product that will be in demand on the market. Banking real estate companies also have a lot of obscure objects you do not know what to do with them. I think that by 2018 it will be needed to admit them illiquid and take the painful decision to write off these objects at a loss, said the expert.

He reminded that property purchased during the credit boom, is now entering the market at the prices, which was once acquired, because its owners are no longer able to fulfill their obligations towards banks. There are other explanations for such a high price, for example, a lot of money invested in repairs. So what? Real estate costs as much as it costs. There are three prices on the market and two of them are inaccurate. The first and second are wrong – the price of rapid implementation, but the third one - the market one, which the buyer is willing to pay in this situation. Those who predict the market meltdown, are mistaken. Meltdown will not occur. Just in one moment artificially inflated price by the seller will turn to the normal, market price, said Danilevich.

Due to economic and political reasons, interest of non-residents in the direction of the Latvian real estate strongly decreased. The issuance of residence permits in exchange for the purchase of real estate was introduced at the right time in order to attract foreign buyers to Latvia and revive the market after the financial crisis. Now, although the deals with non-residents have been concluded, there is no more favourable emotional background, each customer has his own story, his own reason to buy in Latvia. Most often it is rational approach: either it is investment with subsequent leasing out of the property, or investment in own potential future place of residence. Recently, however, attitude to the non-residents very changed: for the Eastern non-resident, even with the purest biography and with the best intentions some of the obstacles and restrictions are insurmountable. Now it turns out that, while waiting for a rich foreign investor, we are sitting on our real estate portfolios, do not sell to the locals, do not change the price ... How long to wait? What would happen if a rich foreigner will not appear?, asks I. Danilevich. He does not see the future opportunities for the appearance of a large group of foreign buyers who may be interested in real estate in Latvia at that price and the quality, as it is now.


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