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How much housing was put into operation in Russia in 2015?

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How much housing was put into operation in Russia in 2015?

In 2016, developers are planning to put into operation as much housing as in 2014 and 2015.  

The construction industry development institute has shared the preliminary results showing last year’s putting into operation of housing.

According to the data coming from the regions, the housing volume put in operation in 2015 was 82—83m m2, which is only 1.5% lower than the previous year’s level  (84.2 m m2). However, it is known that only the preliminary figures are announced in January and they are elaborated upon a few months later, and as a rule they increase. For example, last year the Federal State Statistics Service (Rosstat) announced 81m m2 of housing in January, but by April the figure had become 84.2m.  

In June, the construction industry development institute made a forecast on the basis of project declarations analysis that the volume of housing put in operation in 2015 might total 88m m2. However, we can say now that this figure will not be achieved. First of all, the construction of 1.5m m2 due to be commissioned in 2015 was stopped. A significant part of this total is the houses of SU-155 Group, the construction of which is now being renewed with state support.

Secondly, developers did not manage to commission about 3m m2 on time, and so this was put off until 2016.

Thirdly, individual housing construction has decreased significantly.  The main reason for all these problems is the population’s decrease in income.

All-Russia leaders in housing

The top five regions for new buildings delivered in Russia has stayed unchanged for three years:

  1. Moscow region
  2. Krasnodar area
  3. Moscow
  4. Saint Petersburg
  5. Republic of Bashkrtostan 6th to 10th places are as follows:
  1. Novosibirsk region (2014 — 9)
  2. Sverdlovsk region (2014 — 7).
  3. Rostov region (2014 — 8).
  4. Republic of Tatarstan (2014 — 6).
  5. Leningrad region (2014 — 13).

The Novosibirsk region has taken such a high place for the first time (in 2012 and 2013 it was 10th, in 2014 9th, and in 2015 6th). For the first time, the Leningrad region’s steadily increasing housing construction has entered the top 10 (in 2012 it was 17th, in 2013 16th, in 2014 13th, and in 2015 10th). The Republic of Tatarstan is losing its position, having moved from the 5th to the 9th place (in 2012 it was 5th, in 2013 and 2014 6th, and in 2015 9th). The Chelyabinsk region has left the top 10 for the first time, having moved to 14th in line (in 2012 and 2013 it was 9th, in 2014 10th, and in 2015 14th).

 

Leaders in construction dynamics

The three leaders with the most positive dynamics in new housing supply are as follows:

  1. Leningrad region
  2. Moscow
  3. Novosibirsk region

The three leaders with negative dynamics are:

  1. Moscow region
  2. Saratov region
  3. Chelyabinsk region

 

Population incomes

It is evident that the most powerful factor influencing new buildings delivered is the demand for housing under construction, as created by the population. In 2015, a sharp reduction in demand took place due to citizens’ income reduction. Thus, according to Rosstat, in November 2015 the population’s income fell by 5.4% as compared with November 2014 and by 8.7% compared with November 2013.  

Unfortunately, the negative dynamics of this index are growing. The fall of the population’s income is not only holding but is increasing from the point of view of the rate of reduction.

Source: RF Federal State Statistics Service

 

State support

The construction industry cannot react sharply to the changes in the market. It is impossible to correlate the new buildings delivered and the immediate demand. So, so as not to allow the industry’s collapse, the Government took a decision on state support in the form of mortgage loan rate subsidies in 2015. The measure turned to be very effective. The sales share of economy-class objects, especially in the regions, to citizens who used the state mortgage loan support totals 70—80%.

Prolongation the program of mortgage loan state support for 2016 is now being considered. Analysis of project declarations of the developers shows that professional developers are not going to decrease new buildings delivered in 2016. The plans are to put into operation 48m m2 in 2016, which corresponds to the levels of 2014 and 2015.  

In the case of an absence of state support and the population’s income decrease, sales of housing under construction will fall sharply. Hundreds of houses are threatened with being stopped as a consequence, and thousands of families risk entering the list of deceived stakeholders.

Budget money for providing for the restarted construction of previously stopped houses will have to be allotted, but on another scale. More than 1 trn rubles might be necessary instead of the currently-needed dozens of blns.

It is also evident that housing construction’s ceasing will cause the ceasing of construction materials production, etc. The 30—40 bln rubles saved may cause a future 10-fold loss from the budget.

The RF Ministry of Construction, Housing and Utilities and the National Association of Hosing Developers are actively lobbying for the necessity of the continuation of the program of mortgage loan state support from the RF Government and hope for its positive resolution.

After the materials of the construction industry development institute

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