How to overcome the crisis: ask for budget money or look for innovative solutions?

Yuriy Kochetkov

ERES from European Real Estate Society (ERES)

Abstract: This paper will examine the different responses from investors, developers and policy makers to the various manifestations of the economic depression in Russia and real estate crisis in the period since 2014.There is now a severe crisis on real estate market in different areas from housing construction to rental business. The crisis is not just one of a shortage of effective demand on market. This is the crisis of common economic system, there real property market and housing are only the components. Institutional investors and developers faced to significant decrease of the profitability of development projects. City authorities have been threatened growth of affected private investors in real estate. Economic Government has recognized the threat to mortgage system and housing construction.The paper presents the analysis of 18 depth interviews with real estate experts and developers. These interviews collected during 2015 and were based on 31 questions. Mostly, questions correspond to intelligent solutions, innovations, and the development of relations between market participants in the period of crisis. The survey organizers were looking for fresh ideas, original solutions, and problem areas.We found that developers consider cost cutting as the main way to solve the problems. They even ready to sacrifice the prospects of introduction of progressive innovations. Another finding is insufficient attention to the income part of the projects and opportunity to create added value by intelligent solutions and technologies for energy efficiency.Will be considered separately efforts of the government and policy makers to help distress developers and support mortgage system.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2016-01-01
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