Russia, it seems, is once again ahead of the rest of the planet. At least in terms of the number of empty new-build apartments.
In a series of crises that have hit the domestic economy, the housing market crisis has revealed the true essence of the construction industry that flourished until recently.
“Well, it serves you right!” the citizens who have been waiting for housing for decades will gloat at the developers who have been eating up, excuse the expression.
And the situation is really interesting. Apartment sales are falling after the cancellation of preferential mortgages, and building houses has become more difficult due to the high cost of debt financing.
Deputy Prime Minister Marat Khusnullin, who oversees housing and road construction in the government, admits that today almost a fifth of all developers are at risk.
Back in April, Khusnullin complained that the deadlines for commissioning about 100,000 apartments had shifted and there might be a risk of bankruptcy for developers. And he gave out a secret: they say, if necessary, the authorities will take prompt measures to support developers. However, if “the situation with the key interest rate lasts for another six months,” as well as “there will be no influx of money into the industry,” and citizens will not “invest in real estate,” then the share of developers in the risk zone may exceed 30%.
In 2025, the share of unsold apartments in the domestic market of new buildings approached 70%. The market is overstocked. At the same time, the cost of housing in the country is artificially inflated. By the way, under the supervision of the government.
According to the classical laws of the market, when there is an excess of goods, it is necessary to reduce prices. But our developers are pushing to the death. An explicit calculation of government subsidies.
Every year, 100 million square meters of housing are commissioned in Russia. But only 79% of Russians have their own. And no matter how much housing is introduced, it still remains inaccessible to many: people’s salaries are low. But the government prefers to subsidize big business rather than citizens.
Developers try to explain the high housing prices by the cost of equipment and materials, new technologies, etc. But developers abroad have the same materials and equipment, but housing is much cheaper. And the salary costs are much higher.
International accessibility indicators put Moscow at the top of the list of inaccessible apartments, along with Hong Kong, Beijing, Bangkok, and Prague.
Why is that? It’s not a secret. It’s all about the greed of developers who, under the auspices of the authorities, have been able to raise prices not even to the limit, but to the point of lawlessness and beg for money from the state for a sub-studio.
Lavrenty Pavlov
Photo: Pixabay.com
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