A square meter of joy

06.08.2014 — Analysis

Residents of the Southern Urals are being promised housing that is attractively priced.

Chelyabinsk is one of 16 Russian regions in which a new state program, Housing for Russian Families, will be underway. On July 3, 2014 an agreement to this effect was signed by the acting governor, Boris Dubrovsky, as well as representatives of the Russian Ministry of Construction of the Russian Federation and the AHML.

This document was one of the priorities in the Chelyabinsk region's 2020 development strategy, which was adjusted at Boris Dubrovsky's behest. According to that regional leader, one of the priority goals for the current government of the Southern Urals is to make housing for the general public more affordable and to get more of it onto the market.

"Our goal is to promote the public's well-being and quality of life. People should have stable employment and a reasonable income. They should make enough to be able to afford a decent place to live. The Chelyabinsk region's 2020 development strategy has focused on a goal - to bring up to 3 million, 700 thousand square meters of housing onto the market, which is practically twice as much as we have achieved to date," stated Boris Dubrovsky after signing the document.

The program's primary objective is to make housing more affordable for all segments of the population. Under the project, the state helps real-estate developers to build the infrastructure for utilities at construction sites for modestly priced homes. Four thousand rubles of public money have been allocated per square meter. This makes it possible to sell modestly priced housing that has been built as part of the program for up to 30 thousand rubles per square meter, but for no more than 80% of the market price.

Thus, the Cabinet plans for 460 thousand families to have the opportunity to purchase a new home on these favorable terms by the end of 2017. Under the program, by the end of 2017 a total of 8.4 million square meters of housing should be brought onto the market in the 16 regions that have signed the agreement.

There is a goal to have 1.92 million square meters available in the Southern Urals by the end of 2014, 2.27 million in 2015, and to "jack up" housing construction to 3.78 million square meters by 2020.

Just in the first six months of 2014, 564.4 thousand square meters of new housing was made available in the Chelyabinsk region. During the same period last year, 24.8% fewer homes (452.28 thousand square meters) were constructed. The pace of construction particularly picked up this summer - twice as much housing became available in June as in May.

As the government has noted, active construction makes it possible to move inhabitants of the Southern Urals out of residences that are of unacceptable quality. In just the first six months, 480 families were able to enjoy a housewarming, which is ten times as many as last year. For comparison, only 44 families were able to be moved during the same period in 2013. As a result, the stock of housing that has been judged unsuitable for residential purposes decreased by 49.4 thousand square meters.

And the construction of private homes also continues to grow in the Southern Urals. The press office of the governor of the Chelyabinsk region told RusBusinessNews that the construction of private homes was helping the region to partially meet its goal of increasing the supply of housing brought onto the market. Overall, private residences account for a third of all new homes completed in the Chelyabinsk region. 

Many municipalities have taken that route. For example, since the beginning of the year, this type of housing has increased 2.4-fold in Magnitogorsk, 3.7-fold in Zlatoust, and 8.7-fold in Karabash. This year, inhabitants of the region obtained 269.8 hectares of land zoned for residential construction (which is 21% more than in 2013). It is expected that around 625.5 thousand square meters of housing will be built on those sites.

In Chelyabinsk these numbers are demonstrably lower – only about 15–16% of residential construction is of private homes. In areas under comprehensive development, high-rise buildings currently account for about 800-900 thousand square meters of housing construction – amounting to several new neighborhoods.

However, these comprehensive-development districts require utilities and social infrastructure. That question is under the special control of the governor of the Southern Urals. Within the region's 2020 program for expanding residential construction there are plans to improve the quality of urban planning by 96%, which includes the provision of municipal utilities.

Funds are being allocated from the regional budget to pipe in gas for the private sector and to build public utility systems. In Kishtim alone, five high- and low-pressure gas pipelines, totaling 6.8 kilometers in length, will be built using the allocated funds (approximately 14 million rubles), as well as gas pressure regulating and metering stations.

Among other things, one of the program's main goals is to reduce the cost of housing. According to the Chelyabinsk office of the Federal Statistics Service, between January and June of 2014, the index of home prices in the primary market has decreased, amounting to only 94.5% of last year's cost. The average price per square meter of new construction is currently 38.5 thousand rubles, 38.6 thousand rubles for better-quality apartments (a drop of 7.2%), and 38.1 thousand rubles for standard-quality apartments (an increase of 4.9%).

In the northwestern area of the Southern Urals, the price per square meter of new construction varies from 41.5 to 50 thousand rubles. In the Traktorozavodsky district, as well as in Kopeisk and Churilovo, a square meter costs between 31.2 and 35.5 thousand rubles.

In Chelyabinsk, the real, average purchase price per square meter in the secondary market of medium-quality housing (apartments dating back to the eras of Khrushchev, Brezhnev, or Stalin, or built based on a "Leningrad-style" floor plan) ranges from 45.3 to 46.5 thousand rubles. For studio apartments, a square meter starts at 52.9 thousand rubles, vs. 54.9 thousand rubles in a luxury building.

In the secondary market, housing prices have risen by 0.9% since the beginning of the year. The price per square meter comes to 34.1 thousand rubles. The cost of a better-quality apartment rose by 2.8%, with an average cost per square meter equal to 35.67 thousand rubles. The price tag for a standard-quality apartment fell by 1.3% – down to 32.1 thousand rubles per square meter.

The implementation of all these measures will help make Chelyabinsk the region with the fastest pace of housing construction in the Urals Federal District. In 2014 there were 24.72 square meters of housing in existence per capita in Southern Urals, but by 2017 this number will increase to 26.8 square meters, and up to 29.73 square meters by 2020.