MAIN FACTORS AND FORMS OF THE GOVERNMENTAL SUPPORT OF HOUSING CONSTRUCTION IN THE WORLD

Sadvakasova Aigul
Êazakh National Medical University named after S.D. Asfendiyarov

Doctor of economic science, Associate Professor at the Department of management in Public Health and Pharmacy http://management.kaznmu.kz/



Various experiences of the developed countries without affordable housing problem, the main features which characterize the formed housing sphere should be noted. The private (collective) property constitutes the main part of housing stock. The municipal housing stock makes up only about 10%-15%. Housing owners compose the biggest part of citizens. The smallest part of citizens rent flats in private fund (municipal fund) for short or long terms. Housing owners are responsible for all expenses on contents, repair, reorganization of housing and they are also obliged to pay all taxes and insurance of the real estate.

Rent payment in private fund compensates all expenses and profit of the housing owner. In municipal fund the rent payment covers only municipality expenses without profit. Rent rates for all property types in various countries are regulated by municipality that uses indirect economic and legal levers for these purposes. Subsidy payment for the contents and repair of housing is carried out by state only for tenants with low income. Most often the citizens buy housing accommodation by long term credit for 10-25 years using different crediting forms, also including mortgage credits where the pledge is the acquired real estate.

In the countries with highly developed market economy the housing industry is under constant attention of the government. The high level of housing provision of citizens and successful solution of many social problems in these countries are confirmed by efficiency of the chosen market economic and administrative regulators. In such countries the models of credits granting and housing and savings systems are constantly being advanced for the purpose of attracting citizens money for construction of their own housing accommodation.

The experience of foreign countries shows that the mortgage crediting where various housing savings systems are used is more advanced and it is more frequently used in the state policy of housing granting.

The mortgage crediting conditions, such as credit volumes, repayment period, annual interest rates and subsidizing provision forms in various countries differ from each other, but nevertheless, the similar moments found.

1. The systems of individual grants are actively developing together with the systems of general grants where the sum of borrowed funds is closely connected with the family income. In this case the conditions of granting subsidies are connected with living conditions, quantity, age of family members and their total income.

2. The loan shares needed for construction or acquisition of ready accommodation are growing.  Most often this share makes up about 80% and it comes up about 20% under initial contribution.

At the same time, the grants for citizens with low income can reach by 93%-95%. There are cases when it is possible to grant 100% of loan for citizens who cannot pay an initial contribution. The credit term and an interest rate size have a principal value in the credit granting procedure. As a rule, the mortgage credit term takes about 30 years and the interest rate size amounts to 5%-6%.

As the world practice shows, the choice of specific systems and tools of investment process stimulation in housing construction is defined by a number of factors.

Firstly, it is the solution degree of housing issue. For instance, in Germany, during the most critical post-war period only the state support methods were applied but since 1971 there was a transition to the social and liberal housing policy directed on protection of the flat tenants’ rights [1]

Secondly, the choice of the state support instruments is defined by economic opportunities of the state: GDP volume per capita, growth rates of national economy, income level and so on.

 

Table 1 - GDP per capita in world countries for 2012 (USD)

 

Country

Place

GDP per capita, USD

Singapore

6

60 900

Norway

9

55 300

USA

12

49 800

Switzerland

14

45 300

Austria

19

42 500

Netherlands

21

42 300

Germany

26

39 100

Finland

34

36 500

Japan

36

36 200

France

37

35 500

South Korea

40

32 400

Slovakia

57

24 300

Russia

71

17 700

Kazakhstan

93

13 900

Source: [2].

 

It should be noted that in recent years the essential value revision of "starting", resource conditions as a choice factor of definite state support model is observed among scientists and experts. On the contrary, the belief  that namely the chosen model of housing policy can stimulate economic growth is getting stronger and it can be confirmed by successful practice of many countries [3]. A number of American experts give such assessment of housing construction growth function [4].

Thus, it is impossible to unambiguously claim that only the economic state opportunities existing at this or that country "for today" define rates and volumes of housing construction.

As we can see from the world experiment, the state support measure has the basic value in realization of not only social but also growth function of housing construction. While determining the state support measure of housing construction in market conditions there can be two extremes [5].

1. The state takes the full responsibility of the social housing construction expenses (Sweden, France - concerning social housing construction).

2. The state provides insufficient support directing the population on the independent solution of housing problem (Azerbaijan).  In this option the growth function of housing construction is partially realized.

3. The state pursues the balanced support policy of housing construction (Germany, Singapore, Austria, Slovakia, Hungary, the Czech Republic, Belarus and other countries).  Because of its implementation, the full realization of both growth and social functions of housing construction is provided.

In addition, as practice shows, the last option of the state support for housing construction provides anti-recessionary protection mechanisms of national economies. Namely, the balanced support policy of housing construction allowed a number of countries to minimize financial crash impacts on American mortgage system, on their housing construction and real estate market.

As it was testified by the conducted practice analysis of the developed countries on mobilization of financial resources necessary for the housing problem solution the state support measure of housing construction, in our opinion, is defined by the following major factors.

Firstly, it is the housing problem acuteness in the country. Proceeding from importance of the housing problem solution, the authorities of mentioned countries (Singapore, Japan, South Korea, Germany, etc.) developed such financial mechanisms of high rates of affordable housing construction that allowed to mobilize internal investment resources of natural and legal entities for increase of national competitiveness. In these countries the solution of housing problem was considered as a priority national task.

In other words, the state support measure of housing construction is defined not only by budgetary opportunities of the countries but also by the chosen strategy of social and economic development and designed model of housing construction.

Secondly, there are economic opportunities of the state. But, again, this dependence of state support volume from the state financial opportunities is very relative. For example, in Netherlands, in due time the country government legislatively obliged the housing corporations to reinvest all received profit in housing construction. Thereby, the additional non-budgetary source of housing construction was created [6].

 

List of used literature

 

1.       Experts predict to the housing market of the USA growth by 5%// 2012  (online resource): http://www.kn.kz/ru/news/view/id/40968/

2.       GDP// 2012 (online resource): http://mostinfo.su/217-vvp-na-dushu-naseleniya-v-stranah-mira-na-2012-god.html

3.       Materials of meeting of the Government of RK. 2013// (online resource): www.zakon.kz/kazakhstan/4556346-onlajjn-transljacija-zasedanija.html

4.       Rating of availability of housing. 2012 //(online resource): http://infogr.am/include/php/embedded.php?graphicID

5.       Why profitability of the national companies falls? 2012 // (online resource): http://kapital.kz/details/22404/

6.       Performance of Nazarbayev N. A. at the Euroasian forum of emerging markets. 2012 //(online resource):http://kiwi.kz/watch/8i14j7mwfofx/