How and why the Ministry of Construction estimates the cost of housing
The Ministry of Construction once every six months updates the standard for the cost of housing in Russia and once a quarter – the market estimate for the regions. Based on these indicators, officials will calculate the amount of social payments under state programs with the use of housing certificates or subsidies, the cost of purchasing housing for those on the waiting list or migrants from a dilapidated and emergency fund. The assessment of the Ministry of Construction does not directly affect the sales of housing by private developers to people or companies; developers set prices on the market on their own.
How will the cost of buying out housing in the regions change?
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According to the new estimate of the Ministry of Construction, the cost of buying out housing will rise in almost all regions. The exception is the Sakhalin Oblast and the Trans-Baikal Territory: there it will decrease by 0.5% and 8.3%, respectively.
Most of all, the Ministry of Construction proposes to increase the cost of buying out housing in Moscow. In the first quarter of 2022, according to the ministry, it will grow by 98% compared to the fourth quarter of this year – up to 265.8 thousand rubles per 1 sq. M.
The five leaders in terms of housing cost growth are also Tyva (an increase of 76% to 95.6 thousand rubles), Adygea (+ 75% to 73.6 thousand rubles), St. Petersburg (+ 74% to 163 thousand rubles ) and Tatarstan (+ 60% to 96 thousand rubles). In the Krasnodar Territory, the estimate increased by 58% to 81 thousand rubles, in the Moscow region – by 45% to 108 thousand rubles, in the Leningrad region – by 39% to 86 thousand rubles.
Why did the Ministry of Construction change the methodology
As explained to RBC by the deputy head of the Ministry of Construction Nikita Stasishin, according to new calculations, the ministry received indicators that are as close as possible to market ones. Stasishin is sure that this will make it possible to more accurately reflect the cost when calculating the amount of social benefits for the purchase and construction of housing, “and, therefore, will make this mechanism for supporting citizens more accurate and fair.” According to the official, with the new assessment, the actual market value “becomes the cornerstone, allowing you to take into account the current dynamics of market development.”
How the methodology has changed
The Ministry of Construction explained to RBC that they are now calculating the average market value of housing on the basis of the weighted average price of one square meter of total living space in the primary and secondary housing markets. In the regions of the Far East, the calculation is carried out only for the primary market.
Earlier, the calculation took into account “heterogeneous criteria”, they say in the Ministry of Construction. For example, these were official statistics on average prices in the primary and secondary housing markets and data from regional monitoring of prices in these markets. The average construction cost was also taken into account and a reduction factor was applied.
Before the methodology was updated, the market price was always higher than that offered to developers by the Ministry of Construction, says Yuri Yurov, general director of the Ryazan development company Marmax. “Therefore, there was a problem – the state could not find quality housing for this money, and the developers did not want to agree to non-market conditions. If prices approach market prices, then, of course, developers will be interested in selling apartments for the state, ”Yurov is sure. Yurov predicts that amid rising mortgage rates and a simultaneous stagnation of household income, demand for housing will fall. “At the moment, this measure will definitely support the market and increase demand, taking into account payments to the population,” says Yurov.
In the third quarter of 2021, the purchase price of housing, established according to the methodology of the Ministry of Construction, was significantly lower than the prices fixed by Rosstat. According to statistics, at the end of the third quarter of 2021, the cost of housing in the primary market in Russia was 93.5 thousand rubles. for 1 sq.m. (prices increased by 23% over the year). In Moscow, the price per square meter in new buildings during the same period increased by 27% – up to 289 thousand rubles. In the secondary housing market, the price per 1 sq. M. Has grown over the same period on average in Russia by 14% – up to 73 thousand rubles, in Moscow – by 22% (up to 242 thousand rubles).
At the same time, the cost of housing, established according to the old methodology of the Ministry of Construction for the third quarter of 2021, was 55.7 thousand rubles. for 1 sq. m in Russia as a whole and in 128.6 thousand rubles. in Moscow.
The results of the auctions in recent years indicate that developers have not shown interest in participating in such projects due to the low cost of buying out properties, says Natalya Garifullina, Marketing Director of the Talan development company: “Now there is demand, so it is more profitable for developers to sell their product to the to the buyer “. Developers, according to her, need to form projects specifically for the needs of the state, and preparation of an object for construction takes at least six months.
The press service of LSR Group, which participated in the sale of apartments for the administration of St. Petersburg, did not comment on the question of whether they would participate in tenders with a new rating more actively, specifying only that the group makes the decision to participate in city auctions individually, evaluating the conditions auctions.
Senator Andrey Kutepov proposed to change the estimated cost of housing due to the rise in prices for building materials. The senator sent a letter to the presidential aide Maxim Oreshkin, in which explainedthat such a revision is needed so that the authorities can calculate the amount of necessary financial support to the regions for the resettlement of emergency housing. According to the data cited by the Ministry of Construction in September of this year, from 2019 to 2024 it is planned to allocate 406.07 billion rubles from the federal budget for the resettlement of citizens from emergency housing, based on the proportion of co-financing of 97 and 7% from regional budgets.
The sharp rise in prices for building materials began in the fall of 2020. First of all, the price of rebar and rolled metal products increased. These materials continue to rise in price even now: according to the National Association of Builders (NOSTROY), they cost more than twice as much as a year ago. Only in October, the cost of metal used in construction increased, according to various estimates, by 15-40%. Following the metal, prices for wood, brick, concrete, insulation and other materials used in construction began to grow since the end of last year. The cost of housing construction, according to NOSTROY, over the past year has grown by 20-25%, depending on the region.
Since the second half of 2021, the conditions of the concessional mortgage program have changed – the rate on it was increased to 7.5%, and the loan limit under the program was reduced to 3 million rubles. As a result, demand for housing in the third quarter started shrink.