in the first half of the year, 21.4 million sq. m of residential construction projects

During the first half of the year, developers launched 21.4 million square meters. m of housing construction projects – 21% more than in 2022 (17.7 million sq. m), follows from the Dom.RF review. In part, this dynamics is due to the low base of March-May 2022, when developers suspended the entry of new projects to the market. In July 2023, the launch slowed down, amounting to 3.5 million square meters. m, which is 11% behind the figure for July 2022, although it is in line with the average level last year.

The volumes of projects started in the second quarter (11.5 million sq. m.) exceeded the volumes of commissioned apartment buildings for the same period (7.9 million sq. m.) by 46% – according to Dom.RF, “stocks of housing under construction are sufficient to ensure the current commissioning volumes within 2.7 years”. At the same time, the concentration of construction in the top ten largest regions is decreasing – there the pace of launches grew in the first half of the year more slowly than the national average (7% versus 21%). Dom.RF explains this by “gradual saturation of demand for new buildings in the largest agglomerations” and an increase in the activity of regional developers. In total, 101.1 million square meters are currently under construction. m of apartment buildings, which is 4% higher than in 2022.

However, the Central Bank has already noted the risks of excess supply – the volume of new projects launched exceeds the volume of housing sales. This is also evidenced by the data of Dom.RF, although the gap is gradually narrowing – in the second quarter, the ratio of launches to the volume of registered equity participation agreements (DDU) was 142% (in the first quarter – 159%, and in the second quarter of 2022 – 186% ). This is due to the growth in demand – 161 thousand DDUs were concluded, which is 32% more than a quarter earlier (122 thousand transactions), and 65% more than a year ago (97 thousand). In just six months, 282,000 DDUs were concluded, which is 6% less than a year earlier.

The share of sold housing under construction (excluding projects with unopened sales) remains at about 30%. It should be noted that in July-August, the balance of supply and demand may improve – in July, the issuance of mortgages grew, and in August, some banks record a record demand for housing loans, which is apparently due to the expectation of an increase in rates on them due to an increase in the key rate on August 15 up to 12%. In the future, demand may cool down due to the rise in the cost of market loans, but will be supported by preferential programs.

Evgenia Kryuchkova