Construction in Russia

Main article: Russian economy

Construction machinery

Main article: Construction equipment (Russian market)

Construction materials

2022:91% of foreign building materials manufacturers continue to work in Russia

At the end of 2022, most foreign building materials companies continue to work on the Russian market despite the conflict in Ukraine. 70% of companies work as before, 21% continue to work, rebranding and leaving themselves the opportunity to return to the market in the future, said Anton Glushkov, president of the National Association of Builders (NOSTROY) in January 2023.

Digital Technologies in Construction

• Digital Technologies in Construction
• Internet of Things in Construction
• Blockchain in construction
• Artificial intelligence in construction

Salaries in construction

Main article: Salaries in the construction of Russia

Construction in Moscow

Main article: Construction in Moscow

Real estate market

Main article: Real estate (Russian market)

Road construction

Main article: Road construction in Russia

Key Events and Statistics

2024

The growth of the start of construction of new facilities continues

At the beginning of construction, there is no slowdown among developers in the first 3 quarters of 2024: for 9m24 - 37.8 million square meters against 34.2 million for 9m23 and 32.1 million for 9m22, and the last three months the trend is positive within 3-7% YoY.

As for the profitability of sales for EBITDA developers, for 1P24 about 27% vs 27% in 2023, 27% in 2022, 21% in 2021 and 20% in 2018-2020.

The pace of construction is growing, and the safety margin is still sufficient. According to formal indicators, developers are doing well, but the slowdown in lending began only in July (the lag in deciding to start construction and start construction may exceed a year), and the decline in sales began only in September 2024 (these data are not yet in the reports of developers).

In Russia, for the first time in 5 years, the leader in terms of construction has changed

In early January 2024, PIK for the first time since July 2018 lost first place in the ranking in terms of current construction in Russia, giving way to Samolet leadership. This is evidenced by the data of the Unified Resource of Developers ("ЕРЗ.РФ").

As RBC writes with reference to the materials of "ЕРЗ.РФ," by the beginning of January 2024, "Samolet" is building 239 apartment buildings in six regions, and the total area of ​ ​ housing under construction is 5.33 million square meters. m. PIK has projects for 4.54 million square meters. m (231 apartment buildings (MKD) in 15 regions). The three largest developers in the Russian Federation are closed by LSR Group with an indicator of 2.24 million square meters. m (106 MKD).

We are the largest company not only in the country, but also in Europe. As I understand it, in the entire history of mankind more than we are now, there were only companies from China, "said Anton Elistratov, General Director of the Samolet group. - Our task is to occupy 25-30% of the total market.

According to ЕРЗ.РФ, in total, the top 10 largest developers as of January 1, 2024 are building 21.46 million square meters of housing (19.09% of the current construction of all Russian developers). A month earlier, the same companies had 21.80 million square meters of housing (19.04%) in the current construction. The top three account for 12.13 million square meters, or 10.79% of housing under construction in the country.

Compared to the rating in December 2023, in early January 2024, the top ten saw another change. The Brusnika company rose two positions and took ninth place, and Granel Group left the top 10, dropping from ninth position to 13th place.

Positions in the top 10 were retained by FSK Group of Companies (fourth place), Dogma (fifth), A101 Group of Companies (sixth), Setl Group holding (seventh), YugStroyInvest Group of Companies (eighth) and Precisely Group of Companies (10th line of the list).^[1]

2023

The volume of construction of bridges and tunnels in Russia for the year increased by a third

The cost of building bridges and tunnels in Russia increased to ₽10,7 thousand per person in 2023 compared to ₽3,3 thousand in 2019, demonstrating threefold growth in four years. TAdviser got acquainted with such data in December 2024.

According to GuideMarket, the active development of transport infrastructure, including the construction of highways, railways and subways, required large-scale work to create new facilities. Also, many existing structures need reconstruction to increase capacity.

The development of the industry is determined by a number of strategic documents, including the Transport Strategy of Russia until 2030, the state program "Development of the Transport System" and the national project "Safe Quality Roads."

Basic funding values ​ ​ are laid down in federal laws, regional and local budgets, as well as in the five-year plan. The main financing is through road funds, which creates certain restrictions on the growth of the industry.

The development of the public-private partnership system in the construction of roads, bridges and tunnels has a positive impact. PPP legislation in Russia was initially formed taking into account the needs of the road industry.

The most important priority of the development of the transport complex is the implementation of measures to form a single supporting transport network. The peculiarities of the geography of Russia create a constant need for the construction of bridges and tunnels to ensure transport connectivity of territories.

For the sustainable development of the industry, it is necessary to increase the amount of funding from budgetary and extrabudgetary sources, improve the regulatory framework and improve the skills of personnel. The implementation of these measures will increase the transport accessibility of territories and improve the quality of life of the population.^[2]

Reduction in the production of prefabricated concrete buildings by 2.6% to 96 thousand square meters. m

The production of prefabricated concrete buildings in Russia in 2023 reached 96 thousand square meters. m, which is 2.6% less than a year earlier. This is evidenced by the data of the analytical company TK Solutions, which were released in November 2024.

According to the study, the Southern Federal District leads the production of modular concrete buildings, which accounted for 96.1% of the market in 2017-2023. Next comes the Volga Federal District with an indicator of 1.7%.

The number of new private residential buildings in Russia over the year increased by 7.5%, to 432 thousand units

At the end of 2023, the number of built individual residential buildings (IZhD) in Russia reached 432 thousand. This is 7.5% more compared to 2022, when the number of such objects was estimated at 401.5 thousand. One of the market drivers was the COVID-19 pandemic, which contributed to the growth of demand for suburban real estate. Market data is provided in the BusinesStat review, released at the end of July 2024.

In 2019, the number of IZhD built in Russia was 276.6 thousand. In 2020, an increase of 8% was noted - up to 298.7 thousand. The peak of construction occurred in 2021, when the number of houses introduced immediately increased by 25%, reaching 373.4 thousand. And in 2022, an increase of 7.5% was recorded. In general, during 2019-2023, the number of built individual residential buildings in the country rose by 56%.

The main factor in the growth of demand for individual housing construction was the possibility of mortgage lending under preferential programs. Since the summer of 2022, the conditions of all preferential mortgage programs (family, rural, IT, etc.) have spread to individual housing construction. In addition, economic benefits contribute to the development of the market: the average cost per square meter of railway is less than in apartment buildings. At the same time, the area of ​ ​ the individual building on average exceeds the area of ​ ​ the apartment by 2.5 times. In the first half of 2024, the share of IZhD in the volume of commissioning of new housing in Russia amounted to almost 70%.

On the other hand, there are also deterrents. This is an increase in prices for building materials and the lack of qualified labor. The production of basic building materials in Russia depends on imported equipment, with the supply of which certain difficulties arose due to the deteriorating geopolitical situation. Therefore, according to the authors of the study, price reductions are not expected.^[3]

Repair and construction services market growth by 12.7% to RUB 400 bln

The market for repair and construction services provided to Russians in 2023 exceeded 400 billion rubles, an increase of 12.7% compared to the previous year. This is evidenced by the data of the analytical company AnalyticResearchGroup, released in May 2024.

According to the study, in 2022 the volume of the Russian market for repair and construction services amounted to 356.5 billion rubles, which is 18.9% higher than the level of the previous year. The CAGR average annual growth rate from 2017 to 2023 was + 6.9%. At the same time, if in 2018-2019 the market grew at a low pace (+ 3-5%), then in 2020 a decline was recorded by more than 12%. However, already in 2021, the market showed a record growth of 24% and was characterized by positive dynamics in subsequent periods, analysts say.

According to them, the positive dynamics is influenced by the rise in prices for construction materials and salaries of employees, the active development of the construction market and the introduction of new housing, as well as other factors.

According to Kommersant, the growth in the commissioning of multi-apartment housing, the transition of developers to the construction of facilities without decoration and the stabilization of consumer sentiment in 2023 led to an increase in demand for the services of repairmen by more than 70%. According to the estimates of the service "Profi," the demand for specialists in complex repair increased by 76% year-on-year, for the construction of walls and partitions - by 57%, painters and plasters - by 56%, tars and floor stackers - by 51%, installation of heating systems - by 46%.

In July 2023, Kommersant, citing Infoline data, wrote that the average cost of materials for renovating apartments in Russia since the beginning of 2023 has grown by 10.6%, to 8,700 rubles. According to the head of the Infoline group, Ivan Fedyakov, prices were affected by increased transportation costs and low warehouse stocks.^[4]

Named the largest Russian developers for the commissioning of housing

At the end of 2023, the first place among Russian developers in the commissioning of housing is occupied by the company PEAK"" with a result of over 2.63 million square meters. In 2022, the developer was also a leader with an commissioning volume of approximately 2.13 million square meters of housing. Such data are given in the study of the "Unified Resource of Developers" (ERZ), the results of which were published on January 10, 2024.

When forming a rating for each developer, residential buildings and houses with apartments with project declarations published in the UISZhS (as of the date of the list), as well as permits for commissioning, are taken into account. For residential buildings, the actually commissioned residential area is taken into account, and for houses with apartments - the actually commissioned apartment area in the total area of ​ ​ the building.

The first place among Russian developers for housing commissioning is occupied by PIK

The ERZ report notes that PIK commissioned facilities in nine Russian regions during 2023. These are 120 apartment buildings and three houses with apartments in 55 residential complexes. The bulk of the introduced housing is located in Moscow - 66%, while the Moscow region accounts for 23%. This is followed by Leningrad (4%), Sverdlovsk (3.3%), Yaroslavskaya (1.5%), Tyumen (0.8%), Sakhalin (0.7%) and Kaluzhskaya (0.5%) regions, as well as Krasnodar Territory (0.5%).

In second place in the ERZ rating is Plane"" (almost 1.5 million square meters), and closes the top three LSR (about 785 thousand square meters). The fourth place went Setl Group (667 thousand square meters), the fifth - (491 FGC thousand square meters). The top ten also included a group (CDS 471 thousand square meters), the company "" (Granel 438 thousand square meters), Dogma (385 thousand square meters), the Fund of equity holders near Moscow (379 thousand square meters) and "" (Yugstroyinvest 352 thousand square meters).^[5]

Construction volume growth by 7.9% to 15.1 trillion rubles

The volume of construction work in Russia in 2023 amounted to 15.1 trillion, rubles which is 7.9% more than a year earlier. This is evidenced by data Rosstat published in February 2024. These figures are cited by the Sherpa Group.

In 2022, the growth rate of construction in the Russian Federation was slightly lower and was measured at + 7.5% with an industry volume of 13.1 trillion rubles. The increase in dynamics in the Sherpa Group was explained by the rise in housing construction, the increase in investments in the Safe Quality Roads national project and the creation of new facilities in industry. So, according to Kommersant, citing Rosstat data, in 2023 the volume of housing commissioning throughout Russia was a record - 110.44 million square meters. m.

The volume of construction work in Russia in 2023 amounted to 15.1 trillion rubles

The Far Eastern Federal District became the leader in increasing the volume of construction work in Russia in 2023: the increase was 19.3%, to 1.44 trillion rubles, due to investment projects in the mining sector and the implementation of the second stage of the development of the Eastern landfill. The only district where a decrease in construction activity was recorded was the Siberian Federal (by 6.8%, to 1.54 trillion rubles). This was mainly influenced by the results of the Irkutsk and Omsk regions, in the first of which there was a reduction in infrastructure costs, and in the second - a return to the indicators of 2021.

The largest volumes of construction among the Russian regions in 2023 were still in Moscow (1.87 trillion rubles), and Tatarstan managed to take second place (708 billion rubles). The volume of construction work in the top 10 regions with the largest construction markets exceeded 6.54 trillion rubles in 2023, their share in the total indicator in the country amounted to 43.3%, having decreased by 2.4 percentage points compared to 2022. The volume of infrastructure expenditures of the federal and regional budgets in 2023 is estimated at 1.7% of Russia's GDP.^[6]

The growth of housing construction by 7.5% to 110 million 438.5 thousand square meters. m. Housing

The volume of housing construction Russia in 2023 reached 110 million 438.5 thousand square meters. m. Housing, which is 7.5% more than a year earlier. Such data are given in materials Rosstat published at the end of January 2024.

According to Interfax, citing materials from the department, the volume of housing construction in 2023 turned out to be a record. The previous maximum was recorded in 2022, when 102.7 million square meters. m of housing.

The volume of housing construction in Russia in 2023 reached 110 million 438.5 thousand square meters. m.

According to the Ministry of Construction and Housing and Public Utilities of Russia, the area of ​ ​ shared construction projects launched in 2023 increased by more than 20% and amounted to 49.4 million square meters. m of housing. According to Deputy Minister Nikita Stasishin, there is a trend of balanced housing development in Russia, because launches have grown mainly due to regions outside the top 10 in terms of housing under construction.

Modern comfortable housing is being built throughout the country. As a result of high launches, the volume of housing under construction at the end of the year, according to the Unified Housing Information System, reached 106.1 million square meters. m, this creates a reserve for future periods. These results could not be achieved without the systemic support of the construction industry provided by the President and the Government of the Russian Federation, he said.

According to the Ministry of Construction, in 2023, 7.4 thousand permits were issued for the construction of 50.08 million square meters. m of housing, the number of existing building permits is 15.4 thousand units for almost 158 million square meters. m of housing. Also, an increase in the urban planning potential of land plots was ensured, taking into account the existing building permits to the level of 438.3 million square meters. m of housing. All these indicators are also above the level of 2022.^[7]

Ministry of Construction: 800,000 migrants work at Russian construction sites

According to the Ministry of Construction, Housing and Communal Services of the Russian Federation, by the end of October 2023, about 800 thousand migrants were involved in Russian construction sites, and the number of open vacancies in this area is about 200 thousand.

Of these [working in the construction of migrants], of course, the lion's share of people are engaged in creating a product, that is, 70-80% of workers in any organization, and the rest are what is usually called a back office, that is, lawyers, managers, accountants and so on. I can't tell you a more accurate figure yet, we are just thinking with Rosstat how to clarify the information coming to us as part of the reports of companies on OKVED, "said Alexander Lomakin, First Deputy Minister of Construction and Housing and Public Utilities of the Russian Federation, in an interview with RIA Real Estate.

He also noted that by the end of October 2023, a total of 10.1 million people work in Russia, according to Rosstat, in the field of construction, housing and communal services and real estate management and turnover. Lomakin does not provide more detailed information on the situation with the construction sector.

The main reason for the personnel shortage in the construction industry lies in low labor productivity, Superjob.ru President Alexei Zakharov told Kommersant. According to him, for more than 20 years, construction companies, instead of introducing advanced technologies, have been focused on importing cheap labor from abroad. The general director of Smart Engineering, Hussein Pliev, believes that the influx of labor from the territories annexed to Russia, as well as refugees from Ukraine, will help partially close the shortage. However, it will not be possible to fill the need for highly qualified specialists in the construction industry in the foreseeable future, since the educational system does not provide the required number of engineers, he said.^[8]

Lack of workers restrains construction growth

Construction in Russia is growing, although it is losing pace. In 2022, construction provided 12.9 trillion rubles of nominal work, for the first 8 months of 2023 an increase of 15.6% YoY at nominal value and 9.4% in real terms.

The construction includes a very wide range of services: residential, commercial, industrial, infrastructure, social construction for all types of property.

For almost 13 years, construction in Russia has stagnated and only at the beginning of 2021 was the level of 2008 surpassed. From 2022, they went into a gap, but by August 2023, by the moving average for 12 months, construction was only 12.5% higher than in 2008.

For comparison, from 2000 to 2008, construction increased THREE times, so the current growth interest is just an attempt to compensate for catastrophic and critical underinvestment for 15 years.

What is the limiter of construction growth? Personnel. If the industry can be scaled through automation, CAD/ACS implementation and various automated/robotic complexes, construction will not work like that. Although modern construction technology is much more efficient and productive, scaling is linear rather than exponential.

This is a huge problem because China's push has come at the expense of tens of millions of free labor on an urbanization trajectory. In Russia, almost all free labor resources have been intercepted and there is no sufficient reserve for high growth rates.

Ministry of Construction: Construction industry lacks 200,000 workers

At the end of February 2023, the Ministry of Construction and Housing and Communal Services of the Russian Federation estimated the shortage of specialists in the construction market at 200 thousand people. As the head of the departmental personnel center Elena Senkevich noted, this figure is "as close as possible to reality."

According to Senkevich, the housing and communal services industry in the Russian Federation as of the end of February 2023 lacks about 90 thousand specialists. She explained that the personnel center of the Ministry of Construction collects analytics for all regions of the Russian Federation, but not all subjects provide information, but 78 out of 85.

The fact that by the beginning of 2023 the construction industry faced a shortage of labor became known earlier. The shortage of workers is at least 12-15%, Natalia Trubchaninova, an expert in the Construction and Development practice of the Visavi Consult personnel agency, told Kommersant. The deficit was aggravated by partial mobilization and geopolitics, said Alexander Galaktionov, general director of the Sherpa Group analytical company.

In October 2022, the Ministry of Construction proposed to attract the unemployed due to a shortage of builders. The Public Council under the department reported a shortage of 3 million to 5 million people.

It is necessary to transform the work of retraining centers for personnel in the regions, including involving developers to help. And also create mobile construction teams on their basis, which can be hired on a contract basis for various projects, - said Nadezhda Prokopyeva, executive secretary of the commission on vocational education of the Public Council under the Ministry of Construction.

At the same time, in June 2022, Deputy Minister of Construction and Housing and Communal Services Nikita Stasishin said that construction companies do not observe a shortage of personnel.

Maybe there is a shortage somewhere, but it is locally solved, and there are no appeals to us, as was the case in two pandemic (we are talking about the COVID-19 coronavirus pandemic) years, that there is a shortage, there are no workers, "Stasishin said.[9]

2022

Growth in the number of private houses by 7.5% to 402 thousand houses

By the end of 2022, the number of individual residential buildings (IZhD) built in Russia reached 402 thousand units, which is 7.5% more than a year earlier. BusinesStat analysts spoke about the situation on the market in early December 2023.

According to experts, in comparison with 2018, the number of commissioned private houses in the Russian Federation increased by 73%. At the same time, the peak of construction occurred in 2021, when the number of houses built increased by 25%. That rise was associated with the impact of the COVID-19 coronavirus pandemic. During the self-isolation regime on thematic Internet sites, there was a twofold increase in interest in suburban real estate. After the transition of some Russians to a remote format of work and study, the best option for many was to move abroad, the researchers explain.

Another catalyst for demand growth and individual residential buildings in Russia, was the economic benefit. An individual house, located on a separate plot, on average exceeds the area of ​ ​ the apartment by 2.5 times. With the same investments, the construction of a private house allows you to improve housing conditions. Earlier, banks did not show interest in cooperation with the segment of individual housing construction due to the difficulties of determining the subject of collateral. There were also difficulties associated with the connection of communications and the lack of standard projects. But, seeing the increased interest of Russians in suburban real estate, the situation began to change. Many large players who were previously engaged in multi-storey construction have transferred to the segment of individual housing.

In turn, banks, understanding the needs of the growing market, began to offer special credit and mortgage products for customers who want to build or buy suburban real estate. Preferential mortgages, which previously affected only the apartment sector, have also spread to the IZhD, the researchers add.^[10]

Construction design services market growth by 18.5% to RUB 832.1 bln

The volume of the Russian construction design services market in 2022 reached 832.1 billion, rubles an increase of 18.5% compared to a year ago. Analysts of the market research agency GuideMarket reported this at the end of July 2023.

According to experts, inflation processes are an important factor in growth. Government support, including the implementation of government projects and programs for the restoration and development of new territories, also has a positive impact on the design industry. The extension of the preferential mortgage program until July 2024 also supports the housing sector, although developers are starting new projects with caution, the study said.

Construction design means the process of creating (developing) a project of a real estate object and registering a construction task. The result of the design is a set of documentation designed to carry out capital construction, reconstruction, expansion, restoration of any property. During the design process, engineering calculations are made, diagrams are created, variants of technical solutions are developed, specifications and estimates are drawn up.

From the report published at the end of July 2023, it also follows that in recent years there has been a high intensity of construction in the Russian Federation. New technologies, methods of work, materials, machines and equipment have appeared, regulatory documents have been updated. At the same time, certain problems are still observed - the lack of an adequate methodology in organizing the construction process, which entails an increase in the construction time, and, as a result, has led to additional financial costs to date.^[11]

Construction volume growth by 5.2% to 12.9 trillion rubles

The volume of work in the Russian construction industry in 2022 reached 12.9 trillion rubles, which is 5.2% more than a year earlier, which was facilitated by government orders and housing construction projects. Such data are given in the Sherpa Group. They were made public in August 2023.

The largest increase in the total growth in construction work is due to industrial construction, said Dmitry Panov, coordinator of Business Russia for the North-Western Federal District. In his opinion, the key driver of growth in this segment is the accelerated implementation of import substitution projects against the background of external sanctions pressure and the application of state support measures for investors.

Deputy Prime Minister of the Russian Government Marat Khusnullin, summing up the results of 2022, noted that during this period 10% more housing was introduced than in 2021 - more than 101.5 million square meters. Housing conditions improved 3.6 million families.

Last year, the design of 402 million square meters of housing was launched, permits have already been issued for the construction of 50 million square meters.

Preferential mortgage programs have been expanded: a preferential mortgage at 8% will be valid until July 1, 2024, a family mortgage program has become available for families with two children, and a preferential mortgage at 2 percent has been launched for residents of new territories.

2.8 million square meters of emergency housing have been resettled, which is 15% more than in 2021. 168 thousand citizens received new housing.

A five-year road construction plan has been approved, which will help bring 85% of the reference road network to a regulatory state.

In addition, 173 million square meters of roads were laid in 2022. The number of documents and approvals in construction decreased from 989 to 751, which made it possible to reduce the time for the implementation of projects, Khusnullin noted.^[12]

Russian developers have sharply increased advertising spending

Russian construction increased advertising costs by 28% in 2022 compared to 2021. Some developers have increased spending at least four times, RIA Novosti reports, citing data from analysts at SberMarketing and Mediascope. Read more here.

Production of steel structures in Russia decreased by 11%

The production of metal structures in Russia in 2022 decreased by 11% compared to 2021 and amounted to 2 million tons. This is evidenced by the data of "Infoline-analytics," which were released in mid-March 2023.

Experts included in the market consideration the frames of buildings and structures, bridge and overpass structures, road metal structures, power line supports and communication masts. According to the researchers, the reduction in production is associated with a decrease in the commissioning of warehouses and shopping centers (shopping centers), as well as with a decrease in the number of actively implemented projects in industry and the agro-industrial complex. It is noted that in 2022, the commissioning of shopping centers in Russia decreased by more than 50% (22 shopping centers with a total area of ​ ​ over 700,000 square meters were commissioned). At the same time, the commissioning of warehouse real estate decreased by 7%.

The trend in the field of commercial real estate was confirmed by the managing partner of Nikoliers Nikolay Kazansky. According to him, in 2021 the volume of input was 4.2 million square meters, and in 2022 - 3.3 million. He noted that this result is associated with the geopolitical situation and the adjustment of developers' plans.

The press service of the Ministry of Industry and Trade, as a comment on these data, sent to Rosstat, which previously reported an increase in the production of structures and parts of structures made of ferrous metals by 3.9 percent. However, Infoline Analytics noted that the data includes cast-iron products, structures for the shipbuilding and engineering industries and other classes.

The general director of Infoline Analytics, Mikhail Burmistrov, expects that negative trends will continue in 2023, and the consumption of metal structures will fall by 10-13%, to 1.75-1.8 million tons. In turn, IBC Real Estate expects an increase in construction volumes no earlier than^[13]

Absolute construction record - 102.6 million square meters of residential real estate

Residential real estate is one of the success stories in Russia in 2022. The industry that has the greatest multiplicative macroeconomic effect and acts as a growth driver for related industries.

Residential real estate has a high localization of production and to a lesser extent than other industries depends on the external market in terms of the supply of components, equipment, materials and intermediate products.

At the very least, capital construction can be fixated on domestic production. Unresolved issues remain with construction equipment, tools, electrical equipment, paints and varnishes and other vulnerable elements, but in general, this industry is in decent condition.

In 2022, an absolute construction record was set - 102.6 million square meters of residential real estate throughout Russia, including taking into account private houses. Compared to 2021, the volume of residential real estate commissioning increased by 11%, 27% higher than the average commissioning in the period from 2015 to 2020 and twice (!) Higher than from 2005 to 2007.

Compared to the beginning of the 2000s, the pace of construction of residential real estate tripled.

But there is also a negative point. In mid-2022, the input rate fell sharply, and from September 2022 to December 2022, the dynamics became negative in comparison with 2021.

The collapse is very significant - by 19% in 4 months, which is even stronger than in the crisis of 2009 (13%). For 30 years, there was a larger drop in 1996.

Mortgage loans recovered at the end of the year, there is integrally demand, although it is 15-20% lower, the Spydell Finance channel noted.

Most of the new living space per resident appeared in the Leningrad, Moscow and Tyumen regions. Least of all - in the Chukotka Autonomous Okrug, Jewish Autonomous and Magadan Regions.

Revenue of construction companies in Russia increased by 13.9% to 11.69 trillion rubles

The total revenue of all companies in the construction industry in Russia, including state construction contractors, residential and commercial real estate developers, at the end of 2022 amounted to 11.69 trillion rubles, an increase of 13.9% compared to 2021. The growth was provided mainly due to budget injections into state buildings, while developers of housing and commercial real estate due to a decrease in demand, cash receipts decreased. This is evidenced by the data of the Sherpa Group, which became known on February 16, 2023.

The growth in revenue of construction industry companies in 2022 is largely due to the fact that during this period the construction of facilities launched a year earlier was underway, says Hussein Pliev, General Director of Smart Engineering. He notes that 2021 was one of the record in terms of the number of investment projects launched for implementation in construction, this reserve very strongly supported the sector in 2022.

According to the head of the Sherpa Group, Alexandra Galaktionova, the main factor that allowed the construction industry to show growth in the first year of the geopolitical crisis was an increase in budget investments in infrastructure construction, including within the framework of national projects. In 2022, 35% more funds were allocated from the federal budget for such projects than a year earlier. As a result, the road and railway builders managed to increase revenue by 20-25% year-on-year, she said.

According to Kommersant"," the total revenue of developers of four large housing markets in the country constructions Moscow-,, and Moscow area St. Petersburg - Leningrad Region by the end of 2022 decreased by 17%, to 2.06 trillion rubles. The revenue of developers of offices and warehouses also fell seriously due to a decrease in demand for such facilities, Dmitry Business Russia Panov, coordinator for the North-West Federal District, told the newspaper.^[14]

The launch of the construction of new housing in Russia almost repeated the record of 2021

In 2022, residential real estate developers began construction of 42.3 million square meters. m against 42.6 million square meters. m a year earlier. Such data in January 2023 were presented by specialists of the Analytical Center "Дом.рф," analyzing the data of project declarations.

Most of the projects in 2022 were launched in the second half of the year, and before that the pace of commissioning slowed down against the backdrop of geopolitical events. The rapid recovery in the activity of developers was observed in August, and in the fourth quarter of 2022, the area of ​ ​ launched projects even overtook the indicators of October-December 2021 - 12.3 million square meters. m. Against 11.2 million, respectively.

The main volume of square meters under construction fell on ten Russian regions. Among the leaders were Moscow, where they launched projects with a total area of ​ ​ 5.8 million square meters, the Krasnodar Territory with 4.8 million and the Moscow Region, where they began construction of 3.2 million "squares."

The Krasnodar Territory became the first place in terms of the growth of new residential complexes - there, compared to 2021, the activity of developers increased by 65%. In the Novosibirsk region launched 24% more projects, in Rostovskaya by 10%.

The largest developers in 2022 were PIK, which launched 2.3 million "squares," "Samolet with 1.4 million square meters and "Dogma" with 1.4 million. Regional developers operating outside the Moscow region, Leningrad region and St. Petersburg have launched the construction of 29.6 million square meters of housing.

The launches of new projects are an important leading indicator that determines the level of housing commissioning in 1.5-2 years, - comments Mikhail Goldberg, head of the Дом.рф Analytical Center. - Strong current launch figures mean there will be no decline in housing introductions until 2025.[15]

Construction costs in Russia fell below February indicators

By the end of 2022, the cost of housing construction in the Russian Federation increased by 37.1% compared to the same period in 2020. Such data are given in the study of the RKS Development Group published in January 2023.

As explained in the group, the period for comparison was chosen, since it was from 2020 that costs began to significantly affect the growth in cost due to failures in the supply of building materials during the COVID-19 coronavirus pandemic.

Almost equal to the December cost was recorded in February 2022, when it was at the level of 37.6%. In the period from February to March 2022, the indicator increased significantly - in early spring it turned out to be 55.1% higher than in December 2020. However, at the end of the year, price reductions occurred in almost all major categories of building materials.

Metal-dependent materials fell the most, and the price of translucent structures and other high-tech materials did not change. Among the more expensive goods were rubble, sand and asphalt. The cost of interior doors and wallpaper has also increased, but the dynamics are constrained by the replacement of materials with more affordable ones. Prices for finishing materials are still high, according to a report published in January 2023.

As we predicted, after an unprecedented jump against the background of panic in the sector there is a stabilization. There is no shortage today: most of the materials and equipment that were not previously available due to sanctions restrictions can now be purchased, including according to the parallel import scheme, - said Elena Bakarzheeva, head of the pricing department in construction of RKS Development Group of Companies.

In January 2023, the head of the Federal Antimonopoly Service (FAS) Maxim Shaskolsky revealed the reasons for the rise in prices for building materials. According to him, such dynamics was associated with the actions of economic entities^[16]

The best pace of construction of residential real estate in the history of modern Russia

The commissioning of residential real estate in Russia is slowing down amid the conflict in Ukraine. From July to October 2022, the accumulated volume of real estate commissioning decreased by 1.4% YoY from 35.8 to 35.3 million square meters, compared with a 27% increase from 25.3 to 32.2 million square meters in the period from March to June 2022.

According to the results of 10 months of 2022, the accumulated growth is 21.6% y/y, since the beginning of the special operation of the Russian Armed Forces in Ukraine, an increase of 10% is the best pace in the history of modern Russia. They have never built as actively as in 2022, which has a positive contribution to economic dynamics. In fact, agriculture and construction is the only thing that is growing in Russia in 2022.

But the negative dynamics are becoming clearer. In September 2022, for the first time, they switched to minus in terms of residential real estate commissioning (minus 8% YoY), in October minus 10.5% YoY.

Mishustin approved the creation of a single register of construction companies participating in the SRO

On May 25, 2022, it became known about the creation in Russia of a single register of construction companies - participants in self-regulatory organizations (SRO). The decree, which approves the rules for the formation and maintenance of such a system, as well as the composition of the information included in it, was signed by Prime Minister Mikhail Mishustin. Read more here.

In the Khabarovsk Territory created an industrial and construction cluster of the Far Eastern Federal District

The Office of the Ministry of Justice of the Russian Federation for the Khabarovsk Territory and the Jewish Autonomous Region completed the registration of the Association of Participants in the Industrial and Construction Cluster of the Far Eastern Federal District. This is one of the steps towards organizing a regional association, the creation of which will become a driver for the development of the production of building materials in the region. The Regional Government announced this on its website on March 6, 2022. Read more here.

2021

The volume of housing commissioning in Russia has updated the record - 92.6 square meters. meters

In 2021 Russia , 92.6 million square meters. m of housing, which was a record figure. Compared to 2020, the market grew by 13%, the Deputy Prime Minister said Marat Khusnullin at a meeting on February 7, 2022. governments

According to him, thanks to this result, 4.2 million families were able to improve their living conditions in 2021 - this is about 10 million people. Khusnullin recalled that by 2029 the annual volume of housing construction in Russia should reach 120 million square meters. m.

In addition, in 2021, permits were issued for the construction of about 40 million square meters. m of apartment housing, which is 41% higher than the same indicator in 2020, the press service of the Ministry of Construction of the Russian Federation reported.

At the construction stage by the end of 2021 there were 94.4 million square meters. m of multi-apartment housing. The urban planning potential of the territories at that time was measured by 241.3 million square meters. m of housing, an increase of 27.9% compared to the beginning of 2021.

The commissioning of housing in Russia at the end of 2021 exceeded the initial forecasts of the Deputy Prime Minister. In November 2021, Khusnullin said that it is planned to introduce 86 million square meters in Russia. m of housing - the maximum annual volume for the country. In his opinion, the entry into the market of a new proposal will allow, among other things, to fight against rising prices for apartments.

According to Khusnullin, one of the tools for supporting housing construction is infrastructure budget loans distributed between entities within the framework of the Infrastructure Menu program. So, in 2021, 500 billion rubles were distributed between 81 regions. In February 2022, the Deputy Prime Minister clarified that the money had already begun to be brought to the regions. Thanks to the already approved projects, it is planned to introduce about 80 million square meters. m of housing, and more than 300 thousand jobs will be created^[17]

Russian regions leading in housing commissioning

In early May 2022, RIA Novosti published the results of a study of the Russian residential real estate market. According to analysts, 92.5 million square meters were commissioned in the Russian Federation. m of housing, which is 12.7% more than a year earlier. For each Russian, there was about 0.6 m of area.

To assess the pace of housing construction in the regions of Russia, experts compiled a rating on the volume of housing commissioning. Regions are compared by the number of square meters of housing introduced in 2021, in terms of one resident. This indicator, depending on the region, varies in the range from 0.06 to 1,772 square meters of housing per person.

The results of the rating indicate that in 2021 the indicator of the volume of housing commissioning per person among leaders and outsiders differs tenfold. More than one square meter per person was introduced in seven regions of the Russian Federation: Leningrad, Kaliningrad, Moscow, Lipetsk regions, Krasnodar Territory, Tyumen and Sakhalin regions. Experts noticed that four out of seven regions were in the leading group and according to the results of the rating of 2022.

At the end of the list of 85 positions were the Murmansk region and the Chukotka Autonomous Okrug with indicators of 0.070 and 0.060 square meters. m, respectively. A relatively low value was also recorded in the Magadan region (0.078 sq. M.) And Kamchatka Territory (less than 0.2 sq. M.).

The report notes that compared to 2020 in all listed regions, with the exception of the Kamchatka Territory, in 2021, the pace of housing construction increased. In the Jewish Autonomous Region, housing was built by 111.7% more than in 2020, in the Chukotka Autonomous Okrug - by 82.2%, in the Murmansk region - by 42.8%. The most significant decrease in housing commissioning for the year occurred in Ingushetia (-37.9%) and the Oryol region (-30%).^[18]

2020

Housing commissioning decline by 1.8% to 1.1 million meters

In 2020, 1.1 million square meters were commissioned in apartment and residential buildings, with a total area of ​ ​ residential premises of 80.6 million square meters. meters. Compared to 2019, the volume of commissioning of housing decreased by 1.8%. 

Among the subjects of the federation, the largest volume of housing construction at the end of 2020 in the Moscow region (10.8% of the commissioned housing area throughout the country), Moscow (6.2%), St. Petersburg (4.2%), Tatarstan (3.3%) and Rostov region (3.2%). Low construction rates and a significant decrease compared to the pace of 2019 are recorded in the Murmansk, Samara, Amur regions, as well as Karachay-Cherkessia and the Jewish Autonomous Region.

Developers' investments in residential real estate soared by 40%, to 77 billion rubles

The volume of investments by developers in residential real estate in Russia at the end of 2020 amounted to 77 billion rubles against 55 billion rubles in 2019. Thus, the growth was about 40%. This is evidenced by the data of the consulting company CBRE.

According to analysts, the residential segment accounted for 35% of real estate investments in the Russian Federation, which is 13 percentage points higher than a year ago. This rise was facilitated by the high activity of developers to acquire plots for construction.

Among the segments of commercial real estate, the most actively developing in 2020 was the warehouse segment. Investments in warehouse facilities increased by 25% in 2020 to more than 40 billion rubles due to the continued demand for the purchase of warehouses for their own use, as well as large transactions for the purchase of facilities for investment purposes. This segment accounted for 19% of investments against 14% in 2020.

By the end of 2020, the volume of investments in office real estate increased by 10% to more than 70 billion rubles. The share of this segment increased from 26% to 32%. Retail real estate suffered the most from the COVID-19 coronavirus pandemic, investments in this segment showed a significant decrease of almost 80% compared to the value in 2019 (up to 16 billion rubles). Investments in hotel real estate fell almost 40% to 11 billion rubles. The share of investments in retail facilities amounted to the lowest value since 2014 of about 7% in the investment structure (by 22 pp below the level of 2019).

The study also says that one of the trends in 2020 was an increase in investments in objects requiring development and capital investments. The share of investments in such real estate increased from 33% at the end of 2019 to 57% in 2020.

Since the beginning of the pandemic, the share of foreign investments has significantly decreased. The main volume of transactions is formed by investments of Russian companies. Their share increased to 94% in 2020 against 74% in 2019.^[19]

PIK and FGC are the largest developers in Russia

At the end of October 2021, Forbes magazine presented an updated edition of its rating of the largest developers in Russia. Analysts of the publication used data provided by the companies themselves, as well as assessments of the Cian.ru and Dataflat research centers.

The largest developer of mass housing remained the PIK group with revenue of 294.6 billion rubles at the end of 2020. As of December 2020, the land bank of the PIK group amounted to 16.6 million square meters. m of unsold real estate.

In second place is the FGC Group of Companies, created by the son of the former head of Glavmosstroy Vladimir Voronin. The company has been on the market for 16 years, during which time it has built more than ten million square meters of real estate. For 2020, the revenue of the FGC Group of Companies amounted to 129.8 billion rubles.

The magazine put the LSR Group of Companies in third position, the main owner of which is Senator from the Leningrad Region Andrei Molchanov. The company's revenue for 2020 is 118 billion rubles.

In the business class housing category, Donstroy Group of Companies became the leader with revenue of 120.7 billion rubles for 2020. The remaining places in the category were distributed by MR Group, Ingrad Group, Pioneer Group and Cortros Group.

Capital Group took first place in the elite housing category, its revenue amounted to 42 billion rubles in 2020. Also in this category were the development companies Vesper, Inteko, Ant Development and the RBI group. Experts note that competition is developing most sharply in the segment of mass housing.

According to Forbes estimates, the revenue of the 10 largest developers of mass housing, included in our rating, increased by 25% (1.53 trillion rubles against 1.22 trillion rubles a year earlier), and the revenue of the five largest developers of business-class housing - by almost 60% (488.1 billion rubles against 308.6 billion rubles).^[20]

2019

2012

Notes