In October, housing commissioning declined due to individual housing construction

In October 2023, the rate of housing commissioning amounted to 6.5 million square meters. m, which is almost a quarter less than last year – this decrease is due to a significant reduction in the monthly commissioning of individual housing construction (IHC). It fell by almost 60% year-on-year, although the multi-apartment building (MCD) sector is showing growth. The dynamics of the individual housing construction market is explained by seasonal factors and the exhaustion of the effect of the “Covid” demand for private housing. Experts, however, do not rule out that this trend may continue due to the growing propensity of citizens to save against the backdrop of an increase in the key rate.

In January-October 2023, housing commissioning amounted to 86.1 million square meters. m, 1.8% lower than the same period in 2022, follows from Rosstat data published yesterday. Against this background, the authorities have rather optimistic expectations for the end of the year in the construction sector – yesterday, the head of the Ministry of Construction, Irek Faizullin, at a meeting with the president, said that housing commissioning would reach a record 104-105 million square meters. m (in 2022 – 102.7 million sq. m). However, the slowdown in the housing market was caused by data from one month, October – 6.5 million square meters were put into operation. m, that is, almost a quarter less than in October 2022 (8.7 million). This is the worst indicator since the beginning of the year – the failure of commissioning individual housing construction to 2 million square meters pulled it down. m – this is almost 60% less than in the same month of 2022, and almost three times lower than in September 2023 (5.1 million sq. m and 5.9 million sq. m, respectively). In ten months, 48 ​​million square meters were commissioned. m individual housing construction – minus 7.6% year on year.

The individual housing construction sector this year showed growth only in January, August and September – otherwise, commissioning volumes lagged behind last year’s (this trend began after the effects of registering houses as part of the dacha amnesty and the free gasification program were exhausted in November 2022, see “Kommersant” from September 15). Earlier, Deputy Head of the Ministry of Construction Nikita Stasishin stated that priorities are shifting towards individual housing construction, since multi-apartment housing has already been “pumped up”. Now state policy in the sector is primarily to increase lending to individual housing construction – by stimulating the use of house kits, introducing the possibility of using escrow accounts (see Kommersant of October 31), as well as creating “individual” mortgage products, including preferential ones. Yesterday, Irek Fayzullin spoke in favor of making mortgages for individual housing construction a separate program and “separate support measures” for the sector.

In the multi-apartment building sector, the situation is more stable – commissioning in ten months amounted to 36 million sq. m. m, plus 7% in annual terms (33.6 million sq. m a year earlier), and separately in October – 4.3 million sq. m. m, an increase of 22% (from 3.5 million sq. m). Taking into account the demand for mortgages – mainly due to preferential loans against the backdrop of rising market rates – the authorities obviously expect that in the future the commissioning of apartment buildings will remain high due to the backlog being formed. Thus, the volume of new launches in October, according to Dom.RF, amounted to 5.6 million square meters. m (an increase of 73% by October 2022), and in just ten months developers launched 38.2 million sq. m. m.

Anna Murmuridis, Deputy Director for Business Development of the Nikoliers Department of Residential Real Estate and Land Development, attributes the October decline in the commissioning of individual housing construction to a number of reasons: “Covid” demand led to a surge in commissioning in 2022 and early 2023, and the rise in the key rate began to influence mortgage decisions from outside citizens. In addition, she adds, “for some time the market will be subject to fluctuations due to private housing construction, the share of which should decline against the backdrop of developers’ plans to create villages with all the infrastructure.” According to NAMICS, seasonality played the main role – after an increase in August to 6.7 million sq. m. m in September a decline began, which was also observed in October. “However, the trend may continue, since, despite the preservation of preferential programs for individual housing construction, the growth of the key rate stimulates the tendency to save. Autumn, the coming winter and expectations of a peak in rates, of course, give rise to a desire to wait for a favorable weather season and less uncertainty regarding rates,” says NAMICS.

Evgenia Kryuchkova