The cost of materials for apartment renovation in Moscow and St. Petersburg is growing

Fluctuations in cement prices, competition for labor, and rising logistics costs have led to an increase in the average cost of materials for finishing apartments in Moscow and St. Petersburg by 12–13% per year. The market is not expecting a further reduction in the cost of repairs. This situation forces developers to more often sell apartments without finishing, which allows them to reduce the cost of housing, at least slightly.

The average cost of materials for apartment renovation in Moscow at the end of 2023 increased by 12.4%, amounting to 8.5 thousand rubles. for 1 sq. m, in St. Petersburg – by 13.3%, to 9.3 thousand rubles. for 1 sq. m, calculated in Infoline. The dynamics turned out to be more pronounced than at the end of 2022, the first year of the new crisis: then repairs in Moscow rose in price by an average of 8.2%. Over five years, finishing prices have risen by 52.6% in Moscow and 51.2% in St. Petersburg.

Managing partner of Prime Life Development Denis Konovalenko says that if in 2022 the cost of materials increased in Moscow by 5.5%, then in 2023 – by 11%. Managing Director of Metrium Ruslan Syrtsov speaks of growth of 10% per year.

In Moscow, in comfort-class residential projects, the cost of finishing for the developer now costs 18–20 thousand rubles. for 1 sq. m, business class – 50-65 thousand rubles, which is 20-30% more year on year, says Roman Rodiontsev, director of the project consulting department at Est-a-Tet. Executive Director of NDV Real Estate Supermarket Tatyana Podkidysheva speaks of growth over the year of 10–12%, including due to a significant share of imported materials. Ruslan Syrtsov explains that materials account for about half of all finishing costs, followed by labor costs, which have also increased.

At the same time, in Moscow, the share of apartments in new buildings without finishing, according to Metrium, increased over the year from 39% to 45%. Developers consider abandoning this option as one of the opportunities to reduce the cost of lots for buyers.

Infoline associates the pronounced increase in repair prices with an increase in the price of dry building mixtures by 23.9% per year in St. Petersburg and by 19% in Moscow. The costs for them amount to up to 30% of the cost of finishing apartments, analysts note. The dynamics, according to them, are due to a 20% increase in cement prices over the year. SMPRO Executive Director Evgeny Vysotsky insists that on average, producer prices for dry building mixtures in 2023 increased by only 4.8%.

Infoline estimates the increase in prices for paints and varnishes at 30%, for metal products at 18–28%. General Director of the Technonikol retail chain Anatoly Nesterov says that gas silicate blocks have risen in price by 27% in 2023, tongue-and-groove slabs by 18%, and plasterboard by 17%. He associates the dynamics with rising tariffs for gas, electricity, and logistics. Knauf Marketing and Sales Director Alexey Zimin says that the price increase is due to an increase in production costs.

Commercial Director of Pridex Alexander Aleinikov believes that the main reason for the rise in prices is the shortage of personnel: for this reason, wages for skilled workers had to be increased by about a third. According to him, equipment and materials have risen in price by an average of 15–20%.

Infoline is confident that the trend towards increasing cement prices will continue. The increase in cost will be 15–20%, in particular, due to the increase in the average tariff for railway transportation from the beginning of 2024. Anatoly Nesterov notes that in November 2023, manufacturers of dry construction mixtures announced a 5% increase in their products in 2024. But already in January, according to him, the increase was 12%. In the first month of this year, tongue-and-groove boards rose in price by 8%, and plasterboard by 6%. The expert notes that many manufacturers have been indexing employee wages since the beginning of 2024. Tatyana Podkidysheva also expects an increase in the cost of finishing due to macroeconomic factors. But Alexander Aleinikov does not rule out price stabilization.

Alexandra Mertsalova