Housing construction costs on the rise again

2010-03-23



After a slight reduction in Q2 2009, housing construction costs in Russia picked up in the second half of the year, and this led to a 13% increase in costs for the full year.

According to Rosstat, the average actual construction cost of 1 m² of housing (excluding individual houses, extensions and outhouses) in Russia came to RUB 30,130 (approximately €750) in 2009. Costs exceeded the Russian average by more than 50% in: Moscow (RUB 59,761 per m²), the Kamchatka Territory (RUB 58,365), and the Chukotka (RUB 92,756), Yamal-Nenets (RUB 58,621) and Nenets (RUB 47,487) autonomous districts.
Housing construction is slightly more costly in rural areas than it is in the cities, and this reflects the trend observed prior to 2008. During that year, however, it was 3% more expensive to implement residential projects in urban areas.
Despite the reduction in construction costs seen in Q2 2009, for 2009 as a whole housing construction was, therefore, 13% more costly than it was in 2008.



The increase in housing construction costs took place despite the fact that, in general, across the construction industry there was no rise in construction prices on the part of the construction companies. The aggregate producer price index in construction lost momentum because of the crisis and the consequent reduction in demand for construction work, and the index fell from 16.9% in 2008 to a mere 0.1% in 2009. A fall of as much as 2.4% was observed in construction and assembly work prices.

Robert Obetkon
Senior Construction Analyst
PMR Publications
robert.obetkon@pmrpublications.com