Oksana Bilozir, Head of the Commission of Inquiry of the Verkhovna Rada of Ukraine into high prices of housing in Kiev, other cities of Ukraine, and non-fulfillment of the legal obligations of builders under investment contracts, considers the prohibition of the sale of buildings under construction to be the only possible way to put an end to abusive behavior occurring in the housing market.

She stated that "we should develop a civilized housing market and a mortgage system, offering affordable housing in already constructed buildings on the market, instead of selling projects that are still on paper or selling the foundation ditches".

According to the deputy's opinion, house-building at the expense of investors used to be a necessary remedy to get over the financial and economic crisis in Ukraine in the late nineties. The building companies were lacking working assets in order to construct accommodations and banks typically did not offer long-term loans at that time. Nowadays however, many building companies do have enough available assets and the corporate giants can raise funds on attractive terms drawing on global financial markets.

Oksana Bilozir also mentioned that "considering the high risks of the suspension of construction in the case of an actual crisis on the housing- market, I cannot guarantee, as Head of the Commission of Inquiry, the timely delivery of the overwhelming majority of premises being built at the expense of investors. Problems remain even if you invest money in a construction undertaking with an irreproachable reputation because a significant amount of accommodations under construction cannot find buyers to meet the current prices. Thus, the building companies lack financial assets to complete construction and the banks do not offer loans as they cannot find guarantees that construction would end nor do they see the potential profit resulting from these undertakings".

Mrs Bilozir believes that under these conditions the government cannot allow the selling of "air" rather than apartments. Therefore, at the Commission of Inquiry meeting she intends to raise a point to discuss the abolition of the Law of Ukraine "On Financial and Credit Mechanisms and Property Management during House Building and Real Estate Operations" and to also discuss the prohibition of the sale of buildings under construction.

According to the MP, the building companies should endure potential processes of fusion, for under these conditions of crisis a company constructing 1-2 buildings often has no chance of survival, thereby endangering real estate investments. Oksana Bilozir considers that some building companies are running the risk of bankruptcy. Therefore the government is expected to consider possible ways in order to complete construction of the above-mentioned objects.

As Mrs Bilozir said, "I would expect stagnation of the house-building market if we do not see the decrease in flat prices by 25-30%. The building companies should reduce the prices of apartments by reducing their profits, by promoting the efficiency of their work, and by introducing cost-saving innovations. And only the large companies can afford to do that".

Oksana Bilozir's press-service