Number of Russia’s Bankrupt Developers Doubles

31 January 2017 (14:54)

UrBC, Moscow, January 31, 2017. The number of construction companies on the private housing co-operative market (Federal Act 214-FZ) that went bust doubled and reached 1.8% last year compared with the year 2015, Kommersant refers to RASK as stating.

According to RASK, 149 companies out of 5,500 ones currently operating on the market are undergoing bankruptcy proceedings. The insolvent companies are leaving behind some 4.5m m2 worth of incomplete housing projects.

Many of the developers are forced to declare themselves insolvent since they cannot get their projects commissioned: loans are unavailable and customers can’t afford to buy their housing, RASK states. Also, recent amendments to Federal Act 214-FZ have meant developers using private investors’ money now have to meet extra, strict requirements.

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