Apartment prices in Russia are rising at a frantic pace. And it seems that the state should take into account any reasonable ideas that will slow down the growth of the cost per square meter. For example, the other day the owner of a metallurgical plant offered to supply its products to developers directly – under a government order or another scheme chosen by the government. Say, such a measure will help stabilize property prices.
You and I are pragmatic people and we well understand: any businessman cares first of all about himself, and then about other members of society. But still: what if the injection of money into the metallurgical industry will really make housing more affordable? And in general, what actions on the part of the state could help the Russians to solve the housing problem?
“Such a proposal assumes, first of all, benefits for metallurgical companies,” Grigory Vaulin, general director of the Ferro-Stroy group of companies, is convinced. – Of course, they are interested in maintaining the current conditions, when, because of the weak ruble, it is more profitable for them to supply products for export and receive income in foreign currency due to this. In turn, subsidizing prices for rolled metal will allow metallurgists to maintain the level of profits while reorienting supplies to the domestic market. In addition, the proposed support measures will lead to an increase in budget expenditures and, accordingly, a reduction in other items.
Galiya Nizamova, head of development projects at Becar Asset Management, also considers subsidizing metallurgy not a very good idea: “If the state begins to control the cost of these products, there is a possibility that prices in other segments will rise. A developer is someone who drags the economy of many industries and enterprises with him. Therefore, we need comprehensive measures that will allow maintaining a balance in the interests of all market participants. The state should help and take care of its citizens, and the citizens are metallurgists, developers, and end buyers of housing. “
– The share of rolled metal in the final price of apartments is small. For the effect, it is necessary to reduce the entire chain of costs: to reduce the time required for obtaining permits, to reduce the cost of acquiring a land plot and connecting to networks, to reduce the social burden on builders (construction of schools, kindergartens, sports complexes), – says the head of the consulting and analytics department of the real estate agency ABC »Yaroslav Darusenkov.
It is not easy to estimate how much the cost of construction will decrease when using such tools without specific figures, continues Grigory Vaulin. Cost growth is influenced by an increase in market prices for other materials (for example, cement and sand) and fuel, a shortage of workers at facilities, and an increase in the cost of imported components. For example, due to a shortage of builders, an increase in labor costs can completely offset the decline in prices for rebar. “Events may unfold in such a way that after strict almost“ planned ”regulation of metallurgists, it will be necessary to introduce similar measures for the cement industry and so on along the chain of related industries,” the specialist says.
According to statistics, metal miners and manufacturers of metal products in Russia do not suffer. According to the Federal Tax Service, the profitability of mining in 2019 in Russia was 29.6%, of mining of metal ores – 66.3%, of metallurgical production – 22%. For comparison: in construction, profitability is 7%. At the same time, the incomes of Russians have been declining for the seventh year, and mortgage rates will soon rise.
– In fact, the head of the metallurgical plant proposes to compensate for the lost profits at the expense of the budget, when it comes to subsidizing metal prices for home builders. It is unlikely that the state will agree to this, given the dissatisfaction of Deputy Prime Minister Andrei Belousov and officials of the Ministry of Industry and Trade with excess profits of metal producers, including on the implementation of government contracts, says Maria Litinetskaya, managing partner of Metrium (a member of the CBRE partner network).
The managing director of the MIEL network, Alexander Moskatov, is also confident: state aid to metallurgists may affect their margins, but will not affect the price per square meter. At least in Moscow, St. Petersburg and Sochi it is not necessary to talk about this for sure: “The cost of construction does not directly affect prices in the main cities of Russia. Prices are based on supply and demand. Demand is more influenced by the monetary policy of the state, real incomes of the population, and the number of offers on the market. In my understanding, helping customers is better than helping industrialists. After all, when assistance to industrialists is massive, this leads to an increase in demand and to the leveling of this assistance. “
– There are always a lot of options on how to attract the state to increase the availability of any consumer goods. And housing is no exception. Direct supplies of building materials, of course, can reduce the cost of building houses and the market price of housing. But specifically, metal in the structure of the cost of construction of an average residential apartment building using monolithic technology takes a share of plus or minus 5-10%. Even if the construction site receives it for free, it will not solve all the problems of the cost of an apartment building, ”says Irina Dobrokhotova, Chairman of the Board of Directors of BEST-Novostroy. – After all, not only metal has risen in price, but all components of the construction cycle – from rubble to mixers to the bathroom, literally such a situation. If you solve it, then it is complex.
It is unlikely that the state will develop a long-term policy of containing prices for building materials, so the cost of construction will continue to grow, Maria Litinetskaya believes: “However, we will not see such rates as in 2019-2020. Most likely, by the end of 2021, a square meter will rise in price by another 10%. “
The main drawback of the idea is the lack of small-scale benefits for home buyers. “In the current market economy, it is difficult to imagine a mechanism that, on the one hand, reduces the cost, and on the other, leads to a decrease in the price of apartments. There are no objective market prerequisites for this. Apart from the prime cost, the demand for housing is also influenced by the demand, which remains high, ”says Roman Rodiontsev, director of the Est-a-Tet project consulting department.
In such a situation, targeted, prompt assistance is more important not to industrial giants, but to ordinary customers, Irina Dobrokhotova agrees with her colleagues. Only it should be targeted – aimed at those who really cannot do without state support.
– For example, the distribution of the same conditions for mortgages to everyone gives a surge in demand from investors – people who buy apartments for future use or for rent. And the subsequent rise in housing prices against this background made it even more inaccessible for many than with the old mortgage rates of 9-10% per annum. It is necessary to support families with children, buyers of the first or only housing, socially unprotected groups of the population, the expert continues.
In Russia, they are already looking closely at modular houses – a sort of analogue of block housing construction of the 21st century. Capital developers, accustomed to the monolith, are still skeptical about this technology. But if the monolith becomes so expensive that its construction will be noticeably less profitable, the factories for the production of residential modules will simply get rich – many will switch to their products.