Against the backdrop of the active launch of new projects, there may be a shortage of housing with close completion dates

The market for new buildings in the Russian Federation remains quite stable in terms of the balance of supply and demand, as follows from the Dom.RF review. The booming demand for housing, which has arisen in recent months due to the demand for preferential programs against the backdrop of rising key rates, is balanced by the high pace of launching new projects, which are significantly faster than the pace of housing commissioning. The housing currently under construction will be enough to ensure the current pace of commissioning until 2026, even in the absence of new projects. However, analysts note the risks of a shortage of housing supply with close completion dates.

Based on the results of January-October, the market for new buildings remains relatively balanced in terms of the relationship between demand and supply of housing, as follows from the Dom.RF review. Over the ten months of this year, 25% more new projects were launched (47 million sq. m) than were put into operation (37 million sq. m). The size of this excess, which ensures an increase in construction volumes, has increased compared to the beginning of the year (then it was equal to 10%).

This dynamics is explained by the active launch of new projects on the market against the backdrop of high demand as a backlog of sales, formed by developers in anticipation of the possible completion of part of the preferential mortgage programs from July 2024 (see Kommersant on November 9). The current volume of housing under construction (105.8 million sq. m), according to Dom.RF, will ensure the current pace of commissioning for 2.8 years in advance, even in the absence of new starts – until 2026.

High sales were also a balancing factor, which, as analysts write, “prevented the market from moving towards excess supply.” Demand, fueled by preferential mortgages against the backdrop of rising rates, led to a record number of registered equity participation agreements (EPA) – 524 thousand for January-September, which is 10% more than a year earlier, and 26% more than for the same period in 2021 of the year. According to Dom.RF forecasts, by the end of the year the maximum number of preschool children will be registered – about 750 thousand.

This increase in demand made it possible to reduce the time frame for selling unsold housing under construction from 3 years at the beginning of the year to 2.3 years. At the same time, the share of sold housing remains at 30% (which is lower than in 2020-2021 – about 40%). This is explained both by the launch of a larger volume of new projects that developers have just begun to sell, and by the removal from the market of houses with a high level of sales due to commissioning. Dom.RF characterizes the current situation as balanced – due to the fact that in 2020–2021, against the backdrop of active stimulation of demand, the ratio of sold-out and completed projects exceeded 90%, which means a supply shortage. Now the figure is slightly higher than the normal level of 70%.

However, against the background of the rush of demand observed in recent months, the market again began to move towards a supply shortage – such risks are recorded in relation to objects in a high degree of readiness. Thus, in projects with planned commissioning this year, 75% of the space has already been sold, and half of the volume of unsold housing will be commissioned after 2024. At the same time, they add to Dom.RF, in projects whose commissioning is planned for 2024–2025, a third of the housing has already been sold. Given the rather low level of construction readiness, this is slightly higher than the “normal” level of sales, which allowed developers to again raise prices for apartments in the third quarter.

Evgenia Kryuchkova