Materials for interior decoration of apartments again rise in price

Decreasing at the end of last year, the cost of materials for finishing apartments is growing again. Since the beginning of 2023, the cost of repairs in Russia has increased by almost 11% due to logistical difficulties and the devaluation of the ruble, and in the second half of the year prices may rise by another 10-15%. Residents will more often purchase materials on their own: due to a lack of specialists and conflicts with equity holders, developers have reduced the share of finished apartments.

According to the results of the first half of 2023, the average cost of materials for apartment renovation in Russia reached 8.7 thousand rubles, which is 10.6% higher compared to the end of last year and 3.8% higher than the level of the first half of 2022. Such data is provided by Infoline. The cost of repairs began to rise after a decline in the second half of last year, analysts explain. Ruslan Syrtsov, Managing Director of Metrium, says that since the beginning of this year, the cost of finishing materials has increased by 15%, and by 5% since the same period in 2022. After the outbreak of hostilities in Ukraine, finishing materials went up significantly, then the situation stabilized, but now we are seeing growth again, says Dmitry Golev, commercial director of Optima Development.

Sergey Bondarenko, head of urban real estate sales at Barnes International Moscow, says that finishing materials have risen in price by an average of 20% since the beginning of the year due to logistical difficulties and the emergence of additional participants in the supply chain. The growth of transport costs was exacerbated by low stocks, says Ivan Fedyakov, head of the Infoline group. As an example, the expert cites dry building mixes, which are partly derivatives of cement, with the transportation of which there were difficulties (see Kommersant of June 20). Mr. Fedyakov adds to this the weakening of the ruble and problems with foreign supplies. “The output of half of the types of basic building materials is 70-100% dependent on Western equipment, many categories require foreign raw materials,” he says.

Russian materials are also becoming more expensive. Thus, interior doors and aerated concrete blocks have grown in price by 10% per year, says Mr. Syrtsov. He does not rule out that manufacturers are trying to maximize profits in preparation for rising costs. Most notably, according to Infoline, paint and varnish materials (by 49.2%), dry building mixtures (by 21.8%), and consumables (by 21%) have risen in price over the past six months. Mr. Bondarenko noticed a strong rise in prices for sealants, adhesives and mounting foam. And the cost of wallpaper for six months decreased by 18%, electricians – by 2.2%, Infoline notes. Roman Syrtsov adds fillers and primers to the positions that have fallen in price by 20-30% per year.

In the context of rising repair costs, developers have begun to offer buyers this option much less frequently. According to the estimates of the agency “NDV Real Estate Supermarket”, in the market of “old” Moscow, 42.9% of lots are now exhibited without finishing, which is 8.6 percentage points higher than last year. The share of options with a fine finish over the year decreased from 38.2% to 34.8%, pre-finishing (walls and ceiling were leveled, interior doors were installed) – from 24.2% to 19.7%. Dombook is talking about an increase in the share of supply without finishing from 33.5% to 36.5% per year.

Sergei Bondarenko believes that for developers, the increase in the cost of work is not as critical as for individuals. Ruslan Syrtsov notes that wholesale suppliers raise prices, but leave a lot of room for bargaining. For developers, finishing costs increased by 8-10% over the year, but mainly due to increased labor costs, notes Alexei Artoshin, commercial director of Glavstroy Regiony. He considers the shortage of qualified personnel and the difficulty in transferring such apartments to equity holders as key factors contributing to a decrease in the supply of apartments with finishing.

Ivan Fedyakov expects an increase in the cost of materials for finishing apartments by an average of 10-15% in the second half of the year. As he notes, housing commissioning remains at a high level, and suppliers of materials are not ready to expand capacities. According to the results of the first half of 2023, 49.5 million sq. m of housing, said Deputy Prime Minister Marat Khusnullin. In the same period last year, according to Rosstat, 50.3 million sq. m.

Focus Technologies calculated that attendance at DIY stores in the first quarter of this year was 1% lower year-on-year, while in the second quarter it grew 3% year-on-year. Commercial director of STD “Petrovich” Konstantin Melnikov says that consumers are actively purchasing materials for individual housing construction: cotton wool, extrusion, aerated concrete, fences, fences. “Perhaps, finishing goods will also rise in price, because their shortage is also possible on the market,” he says. SMPRO said that there are no reasons for price growth at the moment.

Alexandra Mertsalova, Alina Savitskaya