One of the largest developers in Russia, the Donstroy holding, continues to accumulate problems. Moreover, recently this has been happening exponentially, and if it were not for the constant financial injections from VTB Bank, which controls the developer, Donstroy, apparently, would be at least on the verge of bankruptcy.
Although the relevant state registers do not provide information about who actually owns the holding, it is no secret to anyone that Andrey Kostin is the ultimate beneficiary of a significant part of Donstroy. Huge budgetary funds are poured into the developer’s structures through the VTB bank he manages, which are then withdrawn from the facilities built by Donstroy through simple schemes. And the holding is managed by the former vice president of VTB, Kostin’s right hand, Alena Deryabina.
Why is Andrey Kostin’s VTB inflating Donstroy’s mortgage “bubble”
Against the backdrop of the crisis that has gripped the Russian economy, Donstroy is trying to demonstrate profitability and is increasing the volume of housing being built. Experts have long pointed out that all this external glamor is nothing more than a bubble that will soon burst. However, with the financial assistance of Kostin, the “cheap” mortgage scheme for Donstroy objects lasted quite a long time. However, this only made the situation worse.
For a long time, Donstroy offered, contrary to all logic, mortgages with “zero” interest on objects being built in Moscow. Many Muscovites fell for this scheme – the conditions under which they were offered to buy apartments really looked attractive.
In fact, neither Donstroy nor VTB lost anything – the “low” percentage was compensated by the high price per square meter. That, however, against the backdrop of a rise in housing prices on the market and, most importantly, the uncertainty of the fate of the ruble, did not bother anyone. However, as it turned out, in all this “there is a nuance.” More precisely – the nuances.
First, the Bank of Russia announced that it would introduce a premium on the risk ratio for mortgage loans in rubles with a down payment of no more than 10% from December 1, 2022. This is a kind of “warning shot”. So far, this is just a measure aimed at limiting the risks that have accumulated too much in the system.
Thus, the regulator is trying to prevent the collapse of the mortgage market and the crowd of deceived equity holders. For, as everyone understands, it is buyers who will suffer as a result of speculation and an inflated mortgage bubble. Which, against the background of the rest of the situation in the country, is far from inspiring.
Well, and secondly, thirdly, and so on, there are some very unpleasant nuances in the objects of Donstroy, which he, with the help of VTB Bank, so enthusiastically sold to buyers under the very “zero” mortgage.
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In general, the fact that most of the developer’s objects are problematic has long been known. It even came to a court decision to demolish the “extra” floors at one of the facilities, and even the name of Koroleva flashed among the victims. But this background, of course, did not stop anyone.
And people, like hot cakes, continued to buy up “cheap” mortgage apartments in the objects of “Donstroy”, without thinking about the places where these residential complexes are being built. Among the latest “prestigious” acquisitions that Kostin, through his structures, sold to those who were eager to buy elite Moscow real estate, several residential complexes attract attention.
The residential complex “Symbol”, positioning its apartments in the elite class segment, is being built on the territory of a former factory. However, this is not news – most of the new LCDs grow on the site of the workshops of the destroyed enterprises. But sales managers do their best to hide the older history of this place – the plant on the site of which Donstroy builds apartments grew up in the thirties of the last century on the site of the Blessed Cemetery. Which has existed here for almost a hundred years.
Only naive children of the Internet believe that the Bolsheviks, who are building a plant on the site of the graves, transferred the remains of the deceased from there.
That is why it turns out that the residents of the buildings “Courage” and “Freedom” live right on the bones of dead Muscovites.
Why is Andrey Kostin’s VTB inflating Donstroy’s mortgage “bubble”
In addition to the cemetery history, the owners of “elite” housing are in for another surprise – a 30-story renovation quarter is being built next door, where visitors from Perov will be settled. Yes, and with the “elitism” itself, questions also arise – in the “Symbol” soon after the surrender, cracks began to form in the walls. The windows here overlook the incredibly noisy and gassed Third Ring Road. Moreover, the balconies actually hang over it, the residents report.
Instead of thin aluminum profiles, cheap PVC was made here, instead of black windows on the facades – white, although the advertisement promised the opposite. Immediately after settling in, the problems of residents are blamed on the management company from the Residential Complex “Symbol”. Managers do nothing, it’s dirty around, there is no promised security, aggressive migrants hang out in the parking lot, there are dead entrances, clogged smelly garbage chutes.
Another interesting object of Donstroy is, again, the “elite” residential complex “Heart of the Capital”, which turned out to be a trap: apartments here will lose a lot in price in a few months, it will be unpleasant to live in them, and it will be possible to get rid of such ballast only with a big discount.
The developer knew in advance about the plans of the Moscow government for this territory, but hid this unpleasant information from customers. It came as a surprise to the owners that close to the “Heart of the Capital” the Moscow Mayor’s Office plans to build a bridge across the Moscow River. The construction, 390 meters long, with three traffic lanes in each direction, will stand close to the LCD windows, next to the kindergarten. Moreover, it will be completely useless for residents of the Donstroy complex: it is impossible to enter it from the residential complex.
Of course, this will drop the price of apartments, which will never recover to the previous level – that is, people will not be able to recoup their investments. Now residents are collecting signatures under an appeal to the Moscow City Hall with a request to either move the bridge to another location or change the project, but so far Sobyanin’s officials have never met Muscovites in such situations. It is clear that the residents of the residential complex have an appropriate attitude towards the Donstroy, which sold the apartments with a surprise.
Another object – LCD “Ostrov” – the developer is building in the west of the capital. At the same time, it is prudently silent about the fact that the complex is being built next to the former industrial zone adjacent to the Galalit chemical plant. In addition, Donstroy is building a large residential complex in Ramenki, and in August signed a contract for the construction of a school and a nursery there, which it plans to put into operation no later than 2027.
The fact that after the commissioning of the Donstroy facilities, their buyers are faced with problems, has also been repeatedly written. This information is by no means secret – on the same review sites, there are quite enough reviews of “grateful” customers, which, at a minimum, should alert those who want to buy housing from Donstroy.
And now the question arises – why is the state-owned VTB pouring money into the Donstroy mortgage program, because, unlike the average consumer of a mortgage loan, its managers are well versed in the issue and understand that the bubble, no matter how much you inflate it, will burst?
Why is Andrey Kostin’s VTB inflating Donstroy’s mortgage “bubble”
The answer here is simple. Thus, the head of VTB Bank Andrey Kostin, who controls Donstroy and its structures, simply withdraws money from the state bank. The essence of the scheme, if you do not go into details and reduce all the tricky and intricate ways to withdraw money, is primitive and simple.
The buyer of an apartment (investor) takes money (a mortgage loan) to buy it from VTB Bank. The apartment is pledged as collateral for the loan. The real money given to the buyer is transferred to the developer (“Donstroy”), who is free to dispose of them at his discretion. Everything seems to be legal. If not for a few nuances. The apartment is being sold at an inflated price. What the bank, of course, knows. As long as the borrower (buyer) regularly pays the loan, everything is fine. No one suffers but himself. But who in our country regrets the “sucker”?
However, many borrowers who have taken out a mortgage at VTB Bank have problems, and they stop paying money on the loan. And then the apartment, as a pledge, becomes the property of the bank. And he puts it up for sale to pay off the debt. Up to this point, everything is logical and legal. But this is where the “nuance” pops up – the apartment was accepted as a pledge at an inflated price. And it is impossible to sell it at auction at this price, it goes at best for half of the appraised value. Well, the fact that in recent months there have been more and more such situations is also no secret to anyone.
As a result, the bank does not receive even half of the loan amount. In the “plus” only the developer who received real money. And, of course, the one who is behind the developer, where the money of the state VTB is pumped in such a simple way. And behind the “Donstroy”, as you know, it is the head of VTB Andrei Kostin. That is why the bubble of “zero” loans from VTB is inflated. And the state will not get poorer, as you know.
