The results of 2015 indicate that the number of bankrupt developers in Russia has risen five-fold, up to 2,700.
According to the Construction Sector Rating Agency, this year the tendency remains the same. In January, over 167 companies went bankrupt, 81% more than in January 2015.
At the same time, most of the bankrupt entities are small enterprises, usually used as contractors and subcontractors. Experts in the Construction Sector Rating Agency have correlated the increase in the developers’ bankruptcy rate with the rise of the amount of unliquidated obligations.
At present, developers have a high debt load. In particular, the construction sector accounts for approximately 16% of bank debt.
Moreover, one of the reasons for bankruptcy is an 8-10% increase in the cost of construction work, while government customers won’t agree to raised contract prices.
Property of building companies after they withdraw from the market is often no more than leased equipment left at construction sites.