Tornike Abuladze: Banking regulation was an irresponsible decision which led  to disastrous results

Tornike Abuladze: Banking regulation was an irresponsible decision which led to disastrous results

access_time2019-10-09 13:09:24

“The second quarter of 2019 clearly showed that the new lending  regulations had a very serious negative impact on the construction business. Developers are facing big problems largely  caused by  regulations, ” Tornke Abuladze, the head of the Georgian Developers Association, states.

Abuladze speaks about a decline in investment in the construction sector  by 91%. 

“A sharp decline in investment in construction was caused by  several factors , largely by banking regulation as well as the lari’s collapse and political events in June-July. The  sector sees a decline in all types of transfers – in  foreign direct investment and the purchase of apartments by buyers, ” Tornike Abuladze explains.

In Abuladze’s words, the construction industry received several tangible blows in a very short time that complicates the adaptation of developers to quick and simultaneous changes.

 


“Banking regulations hit the purchasing power of citizens and  deprived  them of chance  to take out mortgages. Construction regulations significantly tighten requirements and standards that has led to a decline in the number of building permits as many companies  cannot meet them.  Political unrest in June-July also prevented  the sales. The situation is further aggravated by the national currency’s devaluation which  sharply reduces the purchasing power of the population, ” the head of the Developers Association points out.

Abuladze believes that the largest  problem is the irresponsible lending regulations adopted without consulting  with the business community that led to very sad consequences such as losses of construction companies and staff cuts by 6,000 person.

In Abuladze’s words, the situation may worsen if parliament adopts  the draft amendments to the labor code.

“The project does not hold water, almost everyone opposes it.  Developers also oppose the  norms that, if adopted, will limit citizens in earn additional income,” he concludes.


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