The cost of housing construction in Moscow was just 34,692 rubles per a sq meter in 2007, while the market price averaged 161,784 rubles.
Photo: Yuri Li-bin
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Construction Authority Unveils the Estimate
Russia’s construction authority, Rosstroy, has unveiled the cost of housing construction in Moscow. It was just 34,692 rubles per a sq meter in 2007, while the market price averaged 161,784 rubles (by Miel estimate). Developers don’t dispute the figure, adding, however, that the payments to Moscow bureaucrats and government’s firms for the land lease, project agreement and connection to utilities double the costs.
Under the review of the Moscow construction business in January through December of 2007, which Rosstroy has released via its web, the costs of housing construction reached 34,692 rubles per a square meter vs. 26,706 rubles in 2006 and 21,167 rubles in 2005. St. Petersburg had 20,377 rubles past year, according to Rosstroy.
But if the construction costs have gained 64 percent in Moscow since 2005, the selling price soared 140.2 percent, the realtors specify. Amid other reasons, the developers blame such skyrocketing growth on the Federal Act on the Interest in Shared Construction of Apartment Houses and Other Real Estate that took effect April 1, 2005.
The regulations toughened requirements to developers, trimming the number of houses accepted for use and, therefore, overbalancing demand and supply on the market. The tricky point is that the official statistics don’t show any decline in the launch of the housing square meters in Moscow.
Rosstroy was accurate when calculating the cost of construction, the market players admit, specifying that they don’t generate the margin of over 360 percent, as the so-called administrative costs omitted by Rosstroy may exceed 100 percent of construction costs.
And that administrative component is widening. The administrative payments, including the city’s share and connection to utilities, have grown even more than the construction costs – roughly two fold, the developers claim.
But even the administrative expenditures that hike the cost of a sq meters for a developer to between 63,000 rubles and 85,000 rubles don’t draw down their margin below 100 percent.
www.kommersant.com
All the Article in Russian as of Apr. 10, 2008
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