Posted: 04/28/2011 at 5:38 am

The global financial crisis has damaged the construction industry the most, more than other industries. But it can be stated that almost equally throughout the world there was a decline in construction caused by the crisis.

Almost all over the world there was a decline in prices in the housing market. Demand fell, and many contractors stopped construction, transferring it to the category of so-called long-term construction projects. The drop in volumes affected both commercial and industrial construction.

In which country the construction crisis was most affected, and where investors can count on a quick revival of the industry, a correspondent for the publication Exchange Leader tried to find out.

At the same time, in developing countries, the crisis only slowed down the pace of development of the construction industry, but did not stop it: if in the pre-crisis year of 2006 in third world countries the growth rate was 11.1%, then in the most difficult year 2009 - only 0.6%, but still growth. If we talk about the leaders - China and India, then the slowdown in the development of the construction industry was even less painful.

Construction is the locomotive that can pull the whole country out of the crisis. Suffice it to recall the classic examples of the Great Depression in the United States, which began in the United States in 1929, and the period of reconstruction of Germany after the First World War. When the construction boom begins, who will be the leader in the construction industry in the near future?

Last year, spending in the construction sector fell by $650 billion.
Last year, the United States lost the title of the world's largest construction market to China. The American market is still in a state of stagnation: home sales in the primary and secondary markets are falling, financing for commercial construction has decreased for the first time in the last 17 years, etc.

Among the EU members after the crisis, construction growth was recorded only in Poland and Switzerland. However, by the end of 2010, investors flocked to Eastern Europe - along with Poland, they were attracted by Bulgaria, Romania, and Croatia. Overall, investment in commercial real estate in Europe last year rose to €83.3 billion, but this is below pre-crisis levels.

Back in 2003, Japan lost second place in the ranking of world construction markets to China, and will soon drop to 4th place, losing third position to India. This is primarily due to a decrease in investment in infrastructure projects due to Tokyo's huge public debt.

In general, in developed countries, construction should reach pre-crisis levels no earlier than the end of 2012.

As already noted, the construction market in these countries did not enter a stage of stagnation, but only slowed down:

China. The country seems not to have noticed the global crisis in construction and continues to implement major projects. This year, construction begins on the world's largest exhibition complex in Shanghai ($3.5 billion), the tallest hotel in the world (632 m) is being built in the same city, and design work is underway on the construction of a 606-meter skyscraper in Wuhan. In order to bring down housing prices (in 2009-2010, the Celestial Empire became the world leader in the rate of growth in prices for residential real estate), Beijing began massive construction of cheap housing - 36 million apartments, of which about 10 million will be built this year. According to experts, the Chinese construction market will double in size in the next decade.

India. The volume of investments in real estate construction in the country grew 10-fold over the past year and reached $593 million. According to the Association of Foreign Investors in Real Estate (AFIRE), India is among the TOP 5 developing countries most attractive for real estate investments (along with China , Brazil, Mexico and Turkey).
Türkiye. Before the crisis, the construction sector was growing at an accelerated pace, exceeding the growth rate of Turkey's GDP. As a result of the crisis in 2009, the construction sector fell by 18%, but already in the first half of 2010 it again received positive dynamics (plus 10.3%) and pulled the entire Turkish economy with it.

Russia. Over the 2.5 years of the crisis, construction volumes in Russia have decreased significantly, but the model of the construction market in the country is changing - instead of local regional companies, federal ones are starting to work, which means a different scale and volume of financing. In addition, large-scale construction is underway in Russia, including infrastructure related to the 2014 Olympic Games and the 2018 FIFA World Cup.

Germany. The construction sector demonstrated stability. Construction orders in Germany rose in March as a rebound in activity in the structural sector outweighed a decline in civil engineering. Despite this, the volume of orders in the 1st quarter still remains below the level of the 4th quarter of the previous year. Home construction orders rose 2.3% in March, following an 8.4% rise in February and a 3.6% decline in January. At the same time, applications for civil projects, which include highways and bridges, fell 3.4%, following a 2.3% decline in February.

Spain. At the end of last year, there was a reduction in the weight of the construction sector in Spain's total GDP to 12.7%. The fall of the construction industry, which is discordant with the overall economic development of the country, is called “historic” by most experts. It led to the emergence of serious problems in the social sphere of the country. Clear evidence of this is that over a relatively short period of time, more than 1 million people lost their jobs in construction companies. Although in the best years for this industry, the number of people employed in construction reached 2.7 million people.

Great Britain. Activity in the UK construction sector increased at its fastest pace in eight months in February, survey results published on Wednesday exceeded the expectations of economists who had predicted a slight slowdown in the industry. According to published data, the purchasing managers' index (PMI) in the construction sector increased in February to 56.5 from 53.7 a month earlier.

A review of the economic situation in the Russian construction sector in the first quarter of 2016 was prepared by the Higher School of Economics.

Analysis of the results of a survey of managers of 6.5 thousand construction organizations conducted by the Federal State Statistics Service (Rosstat) in the first quarter of this year. g., revealed a significant deterioration in the business climate in the industry. Negative dynamics in the reporting period were recorded for almost all the main indicators characterizing construction activity. As a result, the main composite indicator of the study, the seasonally adjusted Entrepreneurial Confidence Index (ECI) in construction in the first quarter compared to the fourth quarter of 2015, fell by 8 percentage points, amounting to (-16%).

A similar magnitude of drop in the value of FPI over one quarter has not been observed since the period of the previous crisis (2009). A retrospective analysis of quarterly FPI values ​​shows that the deepest point of decline in the industry’s business activity was recorded at the epicenter of the previous crisis, in the second quarter of 2009, when the FPI amounted to

(-21%). A weak explanation for the identified drop in IPU may be the fact that, taking into account the specifics of the construction industry, the first quarter of any year for contractors is almost always a relatively “dead season”, when, compared to the most active fourth quarter, the overall business activity of construction organizations decreases. However, the depth of the “drawdown” is alarming, even taking into account seasonal fluctuations. If the identified drop in the IPU is not primarily a seasonal adjustment, but an intensification of a downward trend in the dynamics of the index, then, unfortunately, in the near future, if this trend continues, the value of the IPU may come close to the minimum value of 2009.

It should be borne in mind that quantitative statistics from Rosstat have been recording a monthly decrease in the volume of work performed in the “Construction” activity compared to the corresponding period of the previous year for more than two years (26 months in a row). Even taking into account the stagnant development of the economy during this period, none of the basic sectors of the economy (industry, trade, services, agriculture and transport) showed negative dynamics of similar duration.

The only construction driver in the last two years has been housing construction. Moreover, its growth rate, for example, in the middle of the first quarters (February) of 2014 and 2015. reached 140.5% and 147.2%, respectively. However, in May last year, the growth dynamics were interrupted and the trend characterizing the volume of housing construction in the country changed its trajectory from positive to negative.

Unfavorable changes identified in the first quarter of 2016 include an increase compared to the previous quarter in the proportion of respondents who reported a decrease in the physical volume of construction work (32 versus 25% in the previous quarter). At the same time, the share of entrepreneurs who recorded an increase in the physical volume of construction and installation work (C&E) carried out by their organizations compared to the previous quarter decreased (21 versus 24% the previous quarter). About half of the enterprises (47%) maintained construction and installation work volumes at the level of the fourth quarter of 2015.

In the reporting quarter, the situation with the supply of the order portfolio worsened. Thus, the share of respondents who reported a decrease in demand compared to the previous period increased (27 versus 21% a quarter earlier), and the share of entrepreneurs who noted increased demand decreased (16 versus 17% a quarter earlier). More than half of the survey participants (57%) had no change in their order portfolio compared to the fourth quarter of 2015. Almost two-thirds (65%) of respondents answered that at the time of the survey the number of concluded contracts was at a “normal” level. A third (34%) of executives rated their organization’s order book as “below normal.” A quarter earlier these figures were 78% and 21%, respectively.

The negative aspects of the first quarter of 2016 include a significant decrease in such production indicators as the average level of production capacity utilization. According to the survey results, its value was 61%, which is 4 percentage points lower than the previous quarter’s estimate. At the same time, 11% of organizations had a load level of no more than 30%. The largest share (26%) of construction organizations used from 51 to 60% of capacity.

According to the survey results, the construction labor market continues to experience negative dynamics in the number of employees, but in the current quarter, compared to the previous quarter, the rate of reduction has slowed down. Thus, in the first quarter, the proportion of organizations that experienced a reduction in construction workers compared to the previous quarter decreased (30 versus 32%). At the same time, the proportion of organizations that expanded their staff increased (14 versus 11%). The balance of the indicator’s assessment was (-16%), which is relatively higher than the value of the previous quarter by 5 percentage points.

In the current quarter, the upward trend in prices for both purchased building materials and construction and installation work continued, with background acceleration. In particular, 81% of representatives of the construction business noted an increase in prices for building materials compared to the previous quarter, and 58% of entrepreneurs noted an increase in prices for the services of their organizations. A quarter earlier, the corresponding estimates were 77% and 52%.

Under the pressure of the current production environment at the beginning of 2016, the industry continued to experience negative dynamics in assessments of such financial indicators of the activities of construction organizations as own financial resources, profit, credit and borrowed funds, and investment activity.

At the early stage of the industry’s entry into a long period of stagnation (two years ago), contractors were still able to partially compensate for increasing costs by rising prices for commissioned industrial and residential facilities. This phenomenon was facilitated by the existing quasi-monopoly of many construction organizations, especially in regional and local construction markets, as well as low competition. Entering a “foreign” regional construction market was often associated with an extremely high cost of entry, which was demanded by some officials who feed the construction industry. Today, with a fairly serious reduction in investment and consumer demand, it has become much more difficult to increase prices for commissioned objects. Under these conditions, contractors and developers often have to negotiate not only among themselves, but also with buyers. Moreover, due to the shortage of buyers with “real” money and low market liquidity, it is increasingly necessary to use such exotic forms of payment for introduced objects as “barter”. If this negative trend intensifies, we may see not only settlements between developers and contractors for part of the unsold apartments, but also, for example, an offer of a block of shares in an enterprise or shopping center.

Direct confirmation of the deterioration in the financial condition of construction organizations and the fall in demand for construction services can be found in the data of the Rating Agency of the Construction Complex (RASK) that in 2015, 2,713 construction companies were declared bankrupt, which is five times more than in 2014. In principle, paradoxically, this is an absolutely normal market situation when weak players leave the race and their place is taken by more effective participants in the construction business. As the results of market surveys show, approximately 15–18% of construction firms with an extremely low, including financial, level of development are constantly operating in the country’s construction market. Most of these organizations regularly report a deterioration in their economic performance. They are low-profit and often have negative added value, work on worn-out and obsolete equipment, and constantly experience difficulties in obtaining new construction orders and qualified labor. The low efficiency of these structures forces them to function on the brink of survival and almost in a pre-bankruptcy state. By and large, the vast majority of these construction organizations need to be taken out of the market altogether, or at least the management should be completely changed. Therefore, the “exodus” of just over 2,700 organizations from the market (according to state registration data in 2015, 512 thousand construction organizations operated in Russia) as a result of bankruptcy is a drop in the ocean.

Sadly, in order to improve and cleanse the industry, this process must be continued within reasonable limits, especially since the vast majority of these companies do not have high capitalization. The fleet of construction machinery and equipment of these organizations, as a rule, is leased, which means that the managers of these organizations will not suffer “suicidal” losses. If these organizations have, albeit a small, portfolio of orders and, in addition, have some of their own equipment, they will be gladly bought up, albeit at dumping prices, by more financially stable and efficient contracting companies. Highly qualified and even semi-skilled personnel can also count on selling their labor to other organizations. As for low-skilled workers, the issue is more complicated, but here, too, there is likely to be a solution. During periods of economic crises, informal activity almost always intensifies, so many of those laid off will start working on the construction and repair of private houses, garages, dachas, bathhouses, fences, etc. Such a maneuver will allow dismissed low-skilled workers to partially retain their previous income, but, of course, will remove them from being subject to taxation. And yet, the main thing in the process of deteriorating economic conditions in construction is to prevent the passage of the bifurcation point in relation to the reduction in employment, when increased social turbulence may arise. It must be remembered that, along with construction workers, management personnel will also be laid off due to the bankruptcy of contracting firms, and these people, due to their educational qualifications and age, will often find it even more difficult to find a job comparable in income to their previous one than it is for the builders themselves.

As a result of the changes that occurred in the first quarter of 2016, almost three-quarters (73%) of survey participants, assessing the general economic situation in their organizations, described it as “satisfactory.” 8% of entrepreneurs called it favorable for their business. The share of organizations in which the economic situation, according to managers, was unsatisfactory, was 19%. A quarter earlier, the valuation ratios were 9, 75 and 16%.

Respondents' forecasts of expected changes in key indicators of construction activity in the second quarter of the year were less optimistic than in the previous quarter.

Of the whole range of problems limiting the activities of the construction business in the first quarter of 2016, survey participants, first of all, noted “insolvency of customers”, “high cost of materials, structures and products”, “high level of taxes”, “lack of orders”, Moreover, the pressure of the latter factor increased by 12 percentage points compared to the previous quarter.

Expert opinion

Director of the Center for Market Research at the Institute of Statistical Research and Economics of Knowledge, National Research University Higher School of Economics Georgiy Ostapkovich:

The reasons for the decline in work volumes in the construction industry are quite obvious. Contractors are highly dependent on domestic demand for their services. Unlike industry, construction has practically no opportunity to use such levers as external demand and work at the warehouse in order to sell products in the future, with a possible improvement in the economic situation. As a result of the recent transition of the country's economy to a stagnation-recession model of development and a fairly long-term decline in the growth rate of production (services) in almost all basic sectors of the country's economy, except agriculture, as well as deterioration in the parameters of the state budget, the demand for construction services has sharply fallen. The main mechanism for optimizing costs for economic agents during a recession, in addition to reducing employment and cutting wages for existing personnel, is to limit new construction and freeze what has been started. Contractors face the same problems when federal and regional budgets are cut, when capital investments for industrial construction and major repairs are primarily sequestered.

Secondly, with regard to housing construction, an extremely negative aspect has been the decline in real disposable income of the population, including real wages, which has been continuing for sixteen months in a row. Negative dynamics of similar duration have not been observed for almost twenty years. As a result of declining incomes and the fear of losing their jobs altogether in a crisis, households traditionally switch to a selective saving model of consumer behavior, practically transferring expensive durable goods, including housing, into the category of deferred demand - unless, of course, this maneuver does not affect life. necessary parameters for the population. It should be noted that the decline in housing construction could have been significantly greater if not for the decision of the Government of the Russian Federation to extend the program for subsidizing mortgage rates for the purchase of housing in new buildings. Of course, the launch of the state support program and its further extension largely prevented the collapse of the housing market, especially after the events of December 2014, when the Central Bank of the Russian Federation sharply raised the level of the key lending rate. True, it must be admitted that this mechanism is more beneficial for large cities - Moscow, the Moscow region, St. Petersburg and other million-plus cities, where the average level of income of the population is quite high. In particular, the average nominal accrued salary in Moscow last year was more than 60 thousand rubles monthly, which is almost twice as much as the all-Russian one (and in December 2015, this figure for Moscow in general amounted to almost 90 thousand rubles, but this is of course, due to bonuses at the end of the year and payments to public sector employees, which are provided for in the first ten days of January 2016). Unfortunately, increased opportunities for purchasing housing in some large metropolitan areas of the country not only increase the population of these cities due to the natural desire of people to move in order to improve the quality of life, but also create certain imbalances in the territorial distribution of labor resources.

A clear confirmation of the rather difficult financial economic situation that is observed today in construction can be the decline in business activity in such a segment of the manufacturing industry as the production of building materials. Thus, according to the results of the latest February survey of managers of industrial enterprises, one of the lowest indices of entrepreneurial confidence among various industrial subsectors was recorded precisely for the totality of enterprises producing construction materials. Moreover, the main components generating the deterioration of the business climate in this industry were two important indicators - “demand” and “production”. According to Rosstat, at the beginning of this year the decline in production in the industry intensified even compared to the stagnation of last year. The simply “massive” decline in production in January this year is of particular concern. on the main positions of building materials. In particular, in January of this year, compared to the corresponding period last year, the production of wall blocks decreased by 40.2%, reinforced concrete prefabricated structures and parts - by 29.8%, Portland cement and bricks - by 26.7% and 25.6% respectively. Such a decline in the production of basic types of building materials has not been observed for many years.

Today, restoring the growth rate of the entire construction complex, at least to zero, primarily depends on positive changes in the economy as a whole and, at a minimum, stopping the fall in real disposable income of the population. Given the continuing decline in household incomes, in 2016 it is extremely difficult to expect from housing builders (during periods of economic crises, housing becomes the main type of construction activity) the same volumes of commissioning that were mastered last year. Currently, the main problem is not how to increase the volume of housing construction, but how to sell this housing. If there is effective demand, contractors can build not only 83.8 million sq.m. housing, as last year, but also 100 and 120 million. But how to sell these products with falling demand is a big question. Of course, widespread dumping can be declared, but the decline in prices for housing construction projects, which has been observed recently, has its limits, expressed in negative profitability for contractors.

The overall decline in housing construction in Russia, expected at the end of 2017, cannot be called critical: after passing the “bottom” of the crisis, the industry began to recover.

Priority projects under personal responsibility

In some regions, the process of recovery of the construction market went a little faster, in others a little slower. How it will proceed depends not only on the pre-crisis state of the industry and government assistance, but also on the correct actions of local leaders. By the way, after a recent meeting of the Presidium of the Council under the President of the Russian Federation for Strategic Development and Priority Projects, Prime Minister Dmitry Medvedev instructed the heads of the constituent entities of the Russian Federation participating in the implementation of priority projects “Mortgage and rental housing”, “Formation of a comfortable urban environment”, to ensure personal control over the achievement of housing commissioning targets. The introduction of personal responsibility of regional leaders for the successful implementation of local projects should increase the activity of the regional authorities.

Construction market: from decline to recovery

In August 2017, at a meeting on the development of housing construction, Russian Prime Minister Dmitry Medvedev noted that the health of the construction industry “reflects, naturally, all the processes that are taking place in the economy as a whole. And demand has narrowed somewhat over the past few years, so in In 2016, slightly less was introduced than in 2015.” The main reason for the current situation is that the industry is going through a recovery period. “In general, a slight decrease in input capacity and houses is not critical for the industry, especially since the state stimulates the construction of standard housing (we are talking about economy-class housing) and its share in the market is growing for the second year in a row. And this is in fact “maybe the most important thing,” the head of government emphasized.

Leaders and outsiders

If you look at the results of housing construction in 2016, you can see a not too large decrease in volumes compared to 2015 (80 million sq.m., i.e. 6.5% less). However, the general trends are not so bad - in 2005, Russia put into operation only 35 million square meters. meters.

At the end of 2016, the leaders in the volume of housing commissioning in Russia were: Moscow region - 8.823 million sq.m., Krasnodar Territory - 4.56 million sq.m., Moscow - 3.362 million sq.m.

In the first half of 2017, St. Petersburg entered the list of leaders, displacing the capital from third place. The list of honors is once again headed by the Moscow region, which managed to commission 3 million sq.m. in six months. Next comes the Krasnodar Territory with 2 million square meters. m. Indicators of the Northern capital - 1.5 million sq.m. And this is almost 30% more than in the same period in 2016. It is worth noting that in terms of the dynamics of the absolute increase in housing commissioning over the specified period, St. Petersburg became the absolute leader. Commenting on the achieved indicators, Vice-Governor Igor Albin, who oversees the construction block in Smolny, noted that “builders and developers of St. Petersburg feel confident and stable, and the city government is interested in further comfortable conduct of the construction business.”

According to general indicators, in the first half of this year, 28 million square meters were put into operation, and the expected figure for 2017 is 75-76 million square meters (by the way, at the beginning of the year it was predicted about 80 million square meters). It is important to note that the main input usually occurs in the fourth quarter, that is, it would be more correct to evaluate the results based on the results of the year.

However, one can still observe a continued decline in housing commissioning compared to the first half of 2016: in Moscow - by 39.2%, in the Sverdlovsk region - by 22.3%, in the Novosibirsk region - by 21.4%, in the Republic of Bashkortostan - by 11.9%, Krasnodar Territory - by 3.8%.

The most noticeable decline occurred in the Magadan region (2.6 thousand sq.m), the Nenets Autonomous Okrug (7.7 thousand sq.m), the Jewish Autonomous Republic (14.6 thousand sq.m), the Murmansk region (16.1 thousand sq.m.), as well as the Kamchatka Territory (16.9 thousand sq.m.).

However, in 27 regions of the country, all the prerequisites have been created to fulfill the plan for housing commissioning in 2017. In order to stimulate supply and demand in the construction market, the state encourages banks to issue loans. “Banks are issuing more and more mortgage loans, both in quantity and in volume. In just seven months of this year, half a million loans worth almost a trillion rubles have been issued. This means that the housing issue is being addressed more actively,” D. Medvedev said. One of the leaders in the number of mortgage loans issued over the last two years in the Central Federal District is the Tula region. The region is now experiencing an increase in housing construction, although just a few years ago the region was experiencing a steady decline. The situation changed after the arrival of the new head of the region, Alexei Dyumin, who took up the prime minister’s “challenge” - introducing personal responsibility for regional leaders for the successful implementation of projects. If in 2013 300 thousand sq.m. were commissioned in the region. housing, then in 2016 622 thousand square meters were already introduced, and in 2017 it is planned to reach the 650 thousand mark. This was facilitated by government support for the mortgage lending market, the construction of economy-class housing and the implementation of social programs. A key role in the mortgage lending market was played by the regional fund for housing construction and mortgage lending, established by the government of the Tula region. As of August 1, 5,025 mortgage loans were issued in the Tula region in the amount of 8.6 billion rubles, which is 13% more than in the same period last year. According to forecasts, in 2017 the number of mortgage loans issued in the Tula region will reach 10 thousand for a total amount of about 17 billion rubles. A very good indicator for the region.

Price per square

If we talk about prices, then according to such an indicator as the average market value of one square meter, Moscow is ahead of everyone. Here the most expensive “square” is 90.4 thousand rubles. The cheapest square meter remains in Kalmykia - 26.01 thousand rubles. These indicators were set for the second half of 2017 by the relevant order of the Ministry of Construction. The same order set the average market value per square meter in Russia at 38.32 thousand rubles. It should be understood that this value is used by executive authorities to calculate the amount of social payments for all categories of citizens to whom these social payments are provided for the purchase (construction) of housing at the expense of the federal budget. As for the real cost per square meter in purchase and sale transactions, it is slightly higher than the indicators established by the Ministry of Construction. For example, in Moscow the price per square meter reaches 200 thousand rubles, and in St. Petersburg - a little more than 100 thousand.

Reasons and forecasts

In 2017, in most regions, houses are being commissioned that began to be built back in 2014-2015, which were very difficult for the economy. Then many developers preferred to complete the construction they had started and take a short break, postponing the construction of new facilities. In general, experts believe that the decline in housing construction will continue into the next year. This can be explained by the fact that the average construction period for an apartment building is 2-2.5 years, and the preparation of the documentation necessary for putting the house into operation takes another year and a half. Another reason that caused the decline in construction volumes, according to the Minister of Construction and Housing and Communal Services Mikhail Men, was the amendments to the Law “On Participation in Shared-Equity Construction,” which tightened the requirements for the financial stability of developers working with shareholders. It is possible that some companies will need time to adapt to working in new conditions, which will affect the pace of implementation of work plans. But this slowdown will only be temporary. The development of mortgage lending, rate reductions, social programs and state support for the industry will make it possible to overcome the 100 million sq.m mark by 2020.

The president of the self-regulatory organization NP of Builders of the Siberian Region, Alexander Savelyev, spoke about the current state of the construction industry.

Alexander Vladimirovich, you traditionally present an analysis of the current state of the construction industry. What trends were typical for construction in 2017?

It is impossible to consider the situation in the construction industry outside the context of the country's economy in general and the regional economy in particular. Thus, the share of the Novosibirsk region in the Russian economy in terms of commissioning of houses was 2.4% in 2010, and 3% in 2016. Investments in fixed assets are 1.1 and 1.2%, respectively. At the same time, the population of the region is 1.9% of the total population of the country.

In the Siberian Federal District, the share of residential building commissioning in the Novosibirsk region was 20.9% in 2010 and 27.6% in 2016, investments - 11.3 and 12%, respectively.

As for the contribution of the construction industry to the regional economy, it accounts for 5% in the GRP structure, but a few years ago the industry’s share reached 7%. In the revenue side of the consolidated budget this is 7–8 billion rubles. annually.

In terms of GRP per capita in 2016, the Novosibirsk region ranked 18th in Russia - 356.1 thousand rubles. According to this indicator, we are inferior to the Krasnoyarsk Territory, which occupies a leading position in the Siberian Federal District and 9th place in Russia, and the Irkutsk region - 16th place in Russia.

In 2015, the Novosibirsk region ranked 6th in housing commissioning per capita in Russia with a coefficient of 0.93. Let me remind you that in 2015, 2 million 585 thousand m2 of housing were commissioned in the region. This year was a record year for housing delivery in the history of the region. In 2016, the commissioning rate decreased to 2 million 209 thousand m2, but, nevertheless, the region entered the top ten in housing commissioning.

If we analyze the main economic and social indicators of January-October 2017 compared to the same period in 2016, we will see that the volume of work in the “construction” activity falls by 16.8%, housing commissioning – by 21.8%, investments in fixed capital – by 7.1%.

In the construction industry of the Novosibirsk region, the average salary is even lower than the regional level by 24% and amounts to 24,433 rubles. For comparison: in financial and insurance organizations - 59,249 rubles, in education - 26,536 rubles, in real estate transactions - 29,126 rubles. This is data for January-October 2017.

Retail turnover is considered a traditional criterion for the rise or fall of the economy as a whole, and builders should also be guided by this indicator. In the Novosibirsk region in January-October 2017, the growth rate was 0.7% - this is at the level of the Siberian Federal District and Russia as a whole. But last year this figure was negative in all federal districts.

You mentioned that the share of the Novosibirsk region in the all-Russian housing commissioning has decreased.

If we talk about the results of the construction industry in the field of housing construction - the commissioning of the total area of ​​residential buildings at the expense of all sources of financing for the period January-October 2017, then in the Russian Federation as a whole this figure is 53.3 million m2, in the Siberian Federal District - 4 million 868 thousand m2, in the Novosibirsk region - 1 million 145 thousand m2. Our share in the Russian Federation decreased from 3 to 2%, in the Siberian Federal District – 9%.

The reduction in input occurred in the Russian Federation - by 4%, in the Siberian Federal District - by 12%, in our region - by 22%. I note that negative growth rates in the region’s construction industry were recorded only in 2016.

Despite the decrease in volumes, the Novosibirsk region retains leadership in the Siberian Federal District, with the Irkutsk region in 2nd place - 694.2 thousand m2, followed by the Krasnoyarsk Territory - 675.8 thousand m2 and the Kemerovo region - 674.7 thousand. m 2.

But the economy is not measured in square meters, it is measured in rubles, therefore, in the process of assessing the efficiency of the construction industry, it is very important to take into account cost indicators. Thus, in 2016 in the Russian Federation, the volume of work for the type of activity “construction” in value terms amounted to 6,184.4 billion rubles, in the Siberian Federal District - 599.1 billion rubles, in the Novosibirsk region - 36.1 billion rubles.

The decline was 4.3% in the Russian Federation, 2.2% in the Siberian Federal District, and 26.1% in the region. This is in 2016. In 2017, only data for January-October is available so far. The rate of decline is 16.8%.

Of course, the volume of funds for the type of activity “construction” is associated with the commissioning of housing. For example, the Krasnoyarsk Territory is developing 146.1 billion rubles. and is building 675 thousand m 2 of housing, the Irkutsk region - 136 billion rubles, 694.2 thousand m 2 commissioned, and in the Novosibirsk region with a volume of funds of 75.4 billion rubles, although I consider this figure incorrect, in fact it is smaller, 1 million 145 thousand m 2 of housing were built. This means that a significant part of the funds that are involved in circulation is aimed at housing construction, 75-80% of all funds are not bridges, tunnels, industrial construction and roads, but housing.

Moreover, for four years in a row, since 2014, the indicator of the volume of work performed in the “construction” type of activity has decreased. Over the ten months of 2017, it decreased by 16.8% compared to the same period last year, and the commissioning of residential buildings decreased by 22%. And the huge numbers of construction reserves - more than 4 million m2 - should not please, but alarm.

The reason for the decline in housing commissioning is said to be a reduction in household incomes.

As for wages, the average monthly nominal accrued salary in the Novosibirsk region for the period January-October 2017 is 32,016 rubles, while the average in Russia is 38,033 rubles. This means that we are chronically behind the Russian average by 19%. This situation has persisted for about the last 7-8 years, and this takes into account the fact that in the Novosibirsk region a regional coefficient of 25% is paid.

The average monthly nominal accrued wages of employees of organizations in the regions of the Siberian Federal District for the period January-September 2017 was 33,032 rubles. The Krasnoyarsk Territory is in the lead - 39,743 rubles, then the Tomsk, Irkutsk regions, Trans-Baikal Territory - with a salary above 36 thousand rubles, the Republic of Khakassia - 33,562 rubles. And only then the Novosibirsk region, which, although it has a good growth rate in wages - about 108%, but lags behind all of the above regions. It should be noted that all these subjects are raw materials regions.

Cash income from wushu of the population for ten months of 2017 in Russia amounted to 31,573 rubles, in the Siberian Federal District - 23,051 rubles, in the Novosibirsk region - 25,517 rubles. Both in nominal average wages and in income, the gap from the average Russian level in our region is about 19%.

And according to income - expenses. The Siberian Federal District has the lowest figures for 2016.

And in 2017, the dynamics of real incomes of the population in the Siberian Federal District showed negative dynamics.

At the same time, in the Novosibirsk region, the share of the population with incomes below the subsistence level exceeds 16%, taking into account the population of the region, this is about 400 thousand people.

The share of families who can purchase apartments with a mortgage in our region in 2016 was estimated at 13.4% of the total population. I believe that this year the situation has not changed fundamentally. This is approximately 200 thousand people from the economically active population. In the Russian Federation, the share of such families is slightly higher – 13.9%.

For clarity: in the structure of expenses of the region’s population in October 2017, the share of expenses for the purchase of real estate decreased by 2.5%, and expenses for mandatory payments and contributions increased by 52.7%. In January-September 2017, the purchase of real estate accounted for only 1% of the region’s population’s expenses.

Today, most apartments are purchased using mortgage loans.

As for mortgage loans issued in the field of primary housing - as of November 1, 2017 - 34 billion 657 million rubles, this is 20,221 loans. Over the ten months of 2017, the growth in units was 19%, in rubles – 26%. Thus, mortgages actually support the construction market.

But at the same time, in the structure of loans received by borrowers in the region, both individuals and legal entities, in 2016, construction accounted for about 3%.

Over the ten months of 2017, there were 18% fewer children registered in the region compared to the same period last year. Signs of overproduction of apartments are evident. Currently, 90 thousand apartments are being built in Novosibirsk, and about 30–40 thousand apartments remain unsold. It will take at least 2-3 years to sell all finished apartments without starting new construction.

On behalf of the President of the Russian Federation, a plan for the transition from shared construction to project financing has been developed. In your opinion, will banks be able to replace private investors in the construction market?

Now private investors are attracting at least 35–40 billion rubles into construction. After the transition to project financing, this money will no longer be available for circulation, and housing lending in the region does not exceed 2 billion rubles. At the same time, the return on investment capital in housing averages 15%, but in project financing the bank rate is 16% per annum. This is an economically unworkable model.

And now the construction business is not highly profitable. For nine months of 2017, the amount of losses of construction organizations in the region amounted to 409 million rubles, organizations for operations with real estate - 1,149 million rubles. For comparison: the profit of agricultural organizations is 3 billion 456 million rubles. - this is a brilliant result, manufacturing industries - 12.5 billion rubles, 11.8 billion rubles. received wholesale and retail trade.

The profitability of goods sold in construction was only 2.6%, the regional average was 5.2%, and in agriculture it was 16.8%. It makes sense for builders to change their activity to agriculture!

Accordingly, the index of physical volume of investment in fixed assets in January-September 2017 decreased and amounted to only 98% compared to the same period last year. For 2016 - 130 billion 280 million rubles, in January-September 2017 - 84,546 million rubles. Unfortunately, this is not the best indicator, given that more than 60% of investments in construction are provided by government orders.

Unfortunately, the industry continues to experience negative dynamics in assessments of financial indicators – financial resources, availability of borrowed funds, as well as investment activity. The rise in prices for building materials remains high. And the fall in government orders only worsens the situation in the construction industry and sets the stage for a recession in 2018.

In connection with the adoption of legislative initiatives, including the new edition of Federal Law No. 214-FZ, there is a tendency to divide the construction market. Strong and sustainable companies that have been operating in the market for a long time and have their own design and production capabilities will survive in this market and develop. In the future we will see a market of large vertically integrated companies. There will be no room for single-project developers or random companies with a single site or small-scale building permits.

Meanwhile, the same number of apartment buildings are being built. The decline in housing construction in the country began in the summer of 2015. Negative dynamics were observed until May 2016. Analysts are confident that the high base effect is to blame: developers rushed to deliver houses in the first year of the crisis. At the same time, a decrease in the volume of commissioned residential space was recorded primarily in the individual housing construction sector: over the year (from the second quarter of 2015 to the first quarter of 2016) this figure fell by 20%.

According to Rosstat, individual housing construction in 2010-2014 accounted for 43-44% of the total commissioned housing area. According to experts, in reality this share may exceed 50-55%.

The peak of delivery of individual houses occurred at the beginning of 2015. The reason is the same as for the consumer boom of December 2014: sharply increased inflation expectations of the population. In the second quarter of 2015, a decline in volumes began, which reached a record level (-33%) in the first quarter of 2016. The growth in the second quarter of this year is associated with a low base and does not compensate for the previous decline. Experts believe that it will be too early to talk about a recovery in demand in the next three quarters. However, the first shock associated with the sharp rise in prices for building materials and the fall in household incomes has already passed in the individual housing construction sector. Experts believe that in multi-apartment construction, where there is an excess supply, the main decline is still ahead.

The decrease in the volume of commissioning of individual housing construction was also affected by a slight decrease in the average area of ​​​​individual houses. Thus, in 2015, buildings became more compact by 4%: their average area decreased from 136 to 130 sq.m. Although there are differences depending on the type of house. Thus, wooden buildings are traditionally smaller (their area is usually 90-95 sq.m.). Brick, stone and block houses are more spacious: on average 150-160 square meters. But during the crisis, the average area of ​​wooden houses decreased the least (by about 1.5%), and their number even increased (by 1.2%).

The decline in individual housing construction affected most regions. The exception is the Moscow region, where in 2015, input, on the contrary, increased significantly.