Perspective of the market of cottage towns

Failure of developer’s huge plans about putting on the market the gigantic number of properties in suburbs cottages towns brought potential buyers in a complicated situation. Using boom, developers offer spend for the future family mansion – typical brick boxes without finishing – million of dollars. And comparably cheap ($150-200 thousand) cottages for the middle class are on the range of deficit. Owners of the land, who earlier announced about building of such villages, just put plots which the y got for construction free of charge, for sale.

Towns cashed in.

In this year in a Kiev region were put in operation about 10 civilized cottages’ towns. It is first “Zoloche”, “Cherry place”, “Yasnoosernoe”, “Petrushki”, “Paritet-Service”, “Romanovo”, “Seleniy gay”, “Plutovo”, “French town” and so on. According to the words of director AH RED Yaroslav Tsukanov, more than 80% did not put flat feet – necked boxes. “For finishing it will take at least 2 years, because you cold not name putting in commission cottage town where there is no house with internal finishing and there is no central road, did not say that there is no any infrastructure objects”, - said Mr. Tsukanov, admitting that biggest part of built cottages will selling during 2-5 years and it is not a fact that they will be bought. According to his words, only in 3-4 villages cottages were bought, while the sales in other did not exceed 20% that made these projects unprofitable for developers.

Experts think that in a present year property market offered almost nothing to the middle class of citizens – the majority of plots’ owners who told that will build on their plots towns of economic class, put it for sale refused from realization of development projects.

Bureaucracy of region administration said that it all connected with wish to earn for land. “The scheme is simple: companies by different ways ask land for cottage developing, show some projects and then said that they had complications with financing and now sell this plot partly”, - said one of authorities. According to not official data, now in each of 6 regions (Kiev-Svyatoshenskiy, Vasilkovskiy, Vishgorodskiy, Obuhovskiy,Brovarskiy, Borispolskiy) is selling 5-6 plots of square 12,35 – 49,42 acres which before were for development of villages.

As a result, middle class could choose only among 2-3 projects which will be under construction in 2007-2008, but according to the words of specialists, has a lot of disadvantages. So by price $625-740 per 10 sq. ft. cities of holding “Kievgorstroy” promoting as places for living for middle class is in 24 miles from the capital and very uncomfortable from transportation. “Family which have chosen this place for al year round living will spend 2-3 hours daily for road and you should not forget about material part of this story “. However, the price for such town - $80-170 thousand – is the same with one-three bedrooms flat in a city”, - said Yaroslav Tsukanov.
Except kievgorstroy cottages, in economic class today projects of not famous companies “Kiev-Gradobut” in Zdorovka ($650 per 10 sq.ft., $98 thousand for a house). On this chose for middle class citizens finishes.

Market does not offer varieties to someone who wants to buy house with internal finishing and land for the sum less then $400 thousand. In general, business class could choose among towns “Paritet-Service” ($1,2 thousand per 10 sq. ft., from $230 thousand per “box”), “New house” ($1,1 thousand per 10 sq. ft., from $243 thousand per “box”), “Three rivers” ($1,1 thousand per 10 sq. ft., from $220 thousand per “box”), “Green gay” ($1,1 thousand per 10 sq. ft., from $220 thousand per “box”), “Green gay” ($1,1 thousand per 10 sq. ft., from $220 thousand per “box”),, “Michael garden” ($900 per 10 sq. ft., from $135 thousand per “box”).

According to the words of specialists, among this plans rich citizens choose by three main principles: transport, closeness to the river or wood, correlation of price and quality of construction materials. “Those who is ready to spend $400 thousand for their house, do not agree to live in village where it is long and hard to get the city. Moreover, these clients do not want to buy townhouses, as it known that walls is common with neighbors. That is why the popular is Obuov and Zhitomir and also cottages by individual projects”, - said manager of the department of commercial property RE “Planet Obolon” Helen Negulaeva.

Cheap elite.

In spite the fact that on the market appeared accommodation of economic class, 80% of offer is still mansions of elite class (in average $1,5 – 3 thousand per 10 sq. ft., square of the house from 3000 sq. ft.). But in this segment our developers still do not learn built objects which will provide the correlation of quality and cost. According to the data of the company “Kansas” only 2% of towns could be referred to villages with developed infrastructure. “Except price of box which with land is $0,5 -1 million developers do not offer another attributes of “elite class”: only security of village, lake and wood. Pool, yacht club and cinema promises just in few projects and it is not a fact that they will be built”, - said Helen Negulaeva.

Moreover, some developers save on the necessary – individual style of the elite house. According to the words of specialists, now rich buyer could get accommodation in village where with the cost $600-700 thousand per box they offer mansions, which is worked out based on Polish mass projects $300 per one. In another project for $2 million the potential buyer has a box and next to it, there are 5 similar houses. This “residence for millionaires” is on the entrance of the cottage town, so through these twin houses will go the rest of the citizens of the village. It is not surprising that these projects nobody buys.

In general the season spring-autumn 2006 showed that buyers of cottage towns are still family with annual income not less than $500 thousand. Those who has income $100-200 thousand enter the market of civilized villages is too hard.

There will not be boom .

Still future of modern cottage towns specialists see in black colors. According to the director of OOO “First Dneprovsk Investment Company” Oleg Homa, if today the average term of realization one project is 2-4 years then in future it will increase. Analytics said that next year will not be rich for new projects: during 2007 specialists of the company “Kansan” are waiting of placing in commission just 200-300 thousand sq. ft. squares in cottage towns. Double growth of quest is could be only in 2008, when on the market will be 4 million sq. ft. in suburban villages. Then it is planning to built and realized 15 projects, which is now in a stage of working out of concept or projecting and also finish economic towns of “Kievgorstroy”.

Further tempos of development of cottage towns will slow down. According to the words of deputy governor of Kiev region Yuriy Kovbasuk the fall on this market is progressing. “Now the quest for cottages is fall as they are too expensive and the buyers’ opportunities are too low. That is why a lot of companies redirect to more liquid multi storey construction in suburban area. Characteristics of construction as cottages as multi storey constructions are similar and I did not exclude that developers will buy land by companies which received it from authorities for buying cottages”, - thinks Mr. Kovbasuk.