MINSK, 14 January (BelTA) – The profit margin of developers running buyer-funded housing construction projects will be within 5%. This limit was set forth by the draft decree that was discussed at the meeting between Belarus President Aleksandr Lukashenko and senior members of the Council of Ministers on 14 January, Vice Premier Vladimir Kukharev told reporters, BelTA has learned.
“The head of state has upheld the draft decree. In line with the document, construction firms who use deposits from individual buyers to fund a project, will have their profit margin limited to 5%. This requirement will not apply to developers who use their own funds for the project or build property for legal entities,” the vice premier noted.
In his words, this requirement will not extend to investment contracts signed before or within half a year after the enforcement of the decree.
Vladimir Kukharev emphasized that the decree seeks to reduce housing prices for all types of buyers. At present housing with the 5% profit margin limit is already built for people on the waiting list for better housing. “The document will cover all types of buyers,” the vice premier said.
When asked whether the 5% profit margin limit makes economic sense, Vladimir Kukharev assured that the decision was preceded by thorough calculations and studies and that the profit margin limit has already been imposed on several buyer-funded projects.
The quality of construction works will not be compromised, either. Vladimir Kukharev explained that construction projects will still be within the prices and expenses set forth by project budgets. “Therefore, the move will not hurt construction firms. The decision is aimed at limiting just the profit of developers, which is the difference between the cost of housing and its sales price,” the vice premier noted.
He added that at present the average price for one square meter of housing in Belarus is Br2,078. “At the same time prices vary greatly depending on the region. For example, the price in Grodno Oblast is Br1,200, in Minsk is Br2,700,” Vladimir Kukharev said.More about Economy