Source: Politika | Sunday, 28.03.2010.| 15:20
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Massive residential construction starts in summer - investors to apply for subsidized loans

Starting next week, the investors who own land and location permits can apply for subsidized loans within the scope of the Government's massive residential construction programme. UniCredit, Intesa, Komercijalna, Raiffeisen, AIK, Erste Bank, Metals and Volksbank signed the contract in the Government's premises on Friday (March 26, 2010) with Oliver Dulić, the Minister of Environment and Spatial Planning, on the project finance. The state will subsidize the interest rate of up to 7%, so that the investors will be paying the interest rate of 2% on these loans. This year's budget includes 2bn RSD for that purpose.

Oliver Dulić says that building companies expressed great interest in these loans and announced construction of 500,000 square meters in Serbia.

As he explained, construction can start before the appropriate building permits are issued. Municipalities will get the manual on Monday on how to grant permits in phases. Based on the location permit, the investors will be able to have the foundations dug and building structure built before the administrative procedure is over, while the legally-binding permit will be necessary for the connections to infrastructure. According to Dulić's announcement, the real estate registry will convert the rights to use to the ownership right for free in about ten days.

– Construction of 5,000 apartments in the location of barracks 4. jul in Belgrade will start in late July or early August, while the maximum price per square meter will be 1,290 EUR. The Ministry will make the planning documentation and issue permits in as short time as possible – said Dulić.

The program of financing massive residential construction should stimulate building industry and real estate market, lower the price of apartments and make it possible for citizens to buy apartments under favorable terms. Who will have the right to procure these apartments will be known soon.

The Minister reminded that the Regulations governing construction of cheap apartments, adopted in early 2010, determined the maximum price per square meters by zones – square meter in Belgrade's second zone will cost 1,595, the square meter in the third zone will cost 1,290, the price in fourth zone will be 945, while the price in other zones in the capital will amount to 695 EUR per square meter.

The price of square meter in Novi Sad's first zone will be 1,100, while the price in the second zone will be 895 EUR. The first zone in Niš and Kragujevac will cost 900 EUR per square meter, while the square meter in the second zone in these cities will cost 695 EUR.

The President of the Executive Board of Erste Bank, Slavko Carić, does not expect the company's debts to be an obstacle to approval of the loans for project finance.

Carić added that the banks would be, first of all, interested in the value of the project, its justification and the interest of citizens in the apartments in that location, and not in the credit worthiness of such companies. He said that the first apartments were expected to be sold in one year.

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