The Ural Real Estate Survey: Siberia and Ural are on the top positions

The Ural Real Estate Survey: Siberia and Ural are on the top positions

Siberia and Ural are on the top positions in Russia on the rate of building growth. Main factors providing rise of housing availability are growth of housing building amount, increase of the population cash income, enlarging of housing financing amount. In the Ural Federal district the commissioned housing amount in the 1st quarter of 2007 grew for 48.8% compared with that of the previous year – up to 779.2 thousand square meters.

The Yamalo-Nenets Autonomous Area has shown the largest growth of marks – in 2.3 times, up to 24.7 thousand square meters. The Tyumen region has 1.7 times growth, up to 219.7 thousand square meters, the Khanty-Mansijsk Autonomous Area has 1.5 times growth, up to 84.5 thousand square meters. 176.7 thousand square meters of housing were commissioned in the Sverdlovsk region (growth for 40.1%), 37.3 thousand square meters were commissioned in the Kurgan region (growth for 36.4%), 236.3 thousand square meters were commissioned in the Chelyabinsk region (growth for 28.4%). At that every region of the Ural Federal district has shown a significant growth of individual residential buildings amounts commissioning.

Mortgage is becoming more and more important factor of housing building increase. Large number of people who were low-income to buy housing currently buy flats by means of mortgage lending. The Russian Federation Regional Development ministry press service says that the total sum of mortgage credits given in the Ural Federal district is 11.3 billion rubles. Top three on the amount of outstanding credits includes the Tyumen region, the Khanty-Mansijsk Autonomous Area and the Chelyabinsk region.

Besides on the territory of Ural Federal district various projects to build commercial real estate are currently having active realization.

Hotel complexes, office buildings, trade entertainment centres, warehouses, sports and cultural as well as other buildings are being constructed.

The Ekaterinburg real estate survey: The trade-office real estate segment has the most intensive development in Ekaterinburg

Ekaterinburg is one of the most go-go developing economic centres of the state. In the experts opinion it remains to be one of the most attractive regions for real estate investment. No wonder that many companies as Russian so foreign are going to build in the Ural capital.

The trade-office real estate segment has the most intensive development in Ekaterinburg. Specialists explain it by medium and small business establishment process at Ural. According to the specialists forecasts the commercial real estate lack will be in Ekaterinburg for 3-5 years and its prices will be growing.

The office rooms price in different parts of the city increased from 30 to 70% in 2006, the trade real estate showed 50-100% price growth. In the nearest one or two years the market will have to pass the stage of minimal filling by objects of modern office real estate and the market transition to the quality competition is possible.

According to information of the committee for the city administration household services Ekaterinburg has lacked premium-class (A) office rooms for several years already. Generally the B and C classes premises have been recently constructed in Ekaterinburg.

As the vice mayor Victor Konteev press secretary Mr. Oleg Zemtsov said the committee for the household services had worked out a strategic project called “Business Centres”. According to this document 15 new business centres will appear in the city till the end of the year and 44 of them will be commissioned by 2015.

The old objects reconstruction will be carried out as well.

The city housing market is also in active development caused by the arrival of people from the other regions and states to Ekaterinburg for work and permanent living, growth of population income and lowering of mortgage lending rates. All these factors increase the housing demand. Last year 1 million 280 thousand square meters of housing were commissioned in the Sverdlovsk region and this number is 2.6% from the total housing commissioned throughout the state. Currently Ekaterinburg is the third city in Russia on housing prices and judging by this parameter it gets closer to Saint Petersburg.

The rural real estate segment has shown an active growth. The reason is that larger part of the Ekaterinburg population cannot afford to buy a flat, high building density in the city and change of the clients priorities towards personal own housing. According to data of the Ural real estate chamber demand and respectively supply at the rural real estate market will have two times growth. The market participants note currently demand for individual building is growing that’s why realtors enlarge the ground areas market near Ekaterinburg.

Generally several major participants out of nearly two hundred developer companies registered in the city provide the construction speed growth. Leaders are the “UKS” municipal enterprise, CJSC “Atomstroycomplex”, CJSC “NOVA-stroy”, CJSC “ASC Pravoberezhniy”, the “Mayak” building corporation.

In the opinion of the Ural real estate chamber analytical department the Ekaterinburg housing market is having hard times in 2007. After panic buying of 2006 when the housing prices grew averagely up to 70 thousand rubles for a square meter the current development stage of the Ekaterinburg market can be determined as stagnation. According to information of the Sverdlovsk region Federal registration agency administration the number of registered transactions at the market has notably decreased compared with that of the second half of 2006.

Experts think that the Ekaterinburg real estate market follows the way of the Moscow market. Prices for flats in Moscow reached the peak in the end of the previous year. The capital market has been having stagnation for several months already and many flats the prices for which were clearly overestimated are losing the price. However it is a temporary matter because the need for housing in big cities is still high.

Among large housing projects being realized in Ekaterinburg the colossus project “Academicheskiy” for 9 million square meters by the Renova company is worthy of note. Besides the developer branch of the “Itera-IteraInvestStroy” oil and gas company has recently announced it intends to construct a housing estate in the VIZ-Pravoberezhniy district. The IteraInvestStroy territories developing department head Ms. Larisa Zhirnova says the district plan project has been already worked out that supposes to construct 1 million square meters including 820 thousand square meters of housing, schools, kindergartens and the commercial real estate objects. Presumably the project cost is 26 billion rubles.

Favor of investors is the most important thing

Experts forecast that the Russian and the Ural Federal district building and real estate market will have an intensive development in the nearest future. Governmental decrees, respective decisions of the regional authorities executive bodies are directed to it and investors as well as developers are trying to reach it.

Lack of own production construction supplies to some extent hampers building development. This lack is caused by the building long stagnation. Still this problem is being rather successfully decided on the territory of the Ural Federal district. During January-April of 2007 the Federal Area building industry companies provided the needs of building organizations on most main items.

In comparison with the same period of 2006 the cement production increased on 12.8%, the construction brick production – on 15.0%, walling material – on 17.6%, large wall elements – on 27.5%, precast concrete components and parts – on 34.5% that exceeds the same marks in Russia.

The mortgage further development, credit resources availability increase to improve the people housing conditions (in 2010 the rate for mortgage housing credits should decrease from current 15 to 8%), other aspects of the priority national project “Available Housing” should theoretically come to solution of the notorious flat problem and stabilization at the real estate market. Reality depends mainly on the regional authorities efforts including creation of investment attractive conditions on their subordinate territory.

The Khanty-Mansijsk Autonomous Area – Yugra real estate survey

The Khanty-Mansijsk Autonomous Area is one of the most go-go developing Russian regions with attractive investment climate.

According to data of the Autonomous Area building department 910.9 thousand square meters of general area housing were commissioned in 2006 or 131.5% to the level of 2005 including commissioned residential buildings (flats) – 746.8 thousand square meters of general area or 128.3% to the level of 2005.

Amount of works and services on building in 2006 was 92.3 billion rubles or 122.6% of that in 2005. All the property categories organizations carried out shell and core works by economic means to the extent of 13.4 billion rubles or 119.6% of that in 2005. Amount of the commissioned individual housing in the total amount of commissioned housing in 2006 was 102.8 thousand square meters or 113.7% of the same mark in 2005.

Private property occupies a large part from the total area of the commissioned residential buildings – 56% (348 thousand square meters) due to the fact that large rates of housing building come by means of the enterprises own funds as well as population becomes more active in the housing building by their own money and usage of credits.

Average price of the general area one square meter in residential buildings and dormitories in cities and districts of the Autonomous Area during January-December of 2006 was 19.3 thousand rubles. In comparison with that of the previous year the one square meter average price got 1600 rubles increase. Within the municipal entities the building average price is from 8 to 36.8 thousand rubles. The market average price per one square meter is 35-40 thousand rubles.

3.2 billion rubles were spent in 2006 to realize the priority national project “Available Housing” in the Khanty-Mansijsk Autonomous Area - Yugra. Housing conditions of 6 435 Yugra families were improved – it is 126% of that in 2005.

Total amount of investment into the housing building including by means of the Autonomous Area budget, municipal entities and extra-budgetary resources grew on 40% during the previous year. Amount of the private investments into the municipal infrastructure modernization showed 2.5 times growth reaching for the first time 46.7% from its total amount.

The Khanty-Mansijsk Autonomous Area authorities intend to encourage development of the housing building market in the region by giving ground areas for wooden low-rise house-building. The region head press-service said ground areas with total square of 200 hectares in the Surgut and Nefteyugansk districts as well as in Khanty-Mansijsk would be put up on auctions this year.

Besides the above said a number of other investment projects to encourage wooden low-rise house-building are carried out in the Area. This is the project of wooden low-rise house-building factory by the German technology “LVL-Stroy”, the project of wooden low-rise house-building factory by the Finnish technology “Coda-Stroy”, the module houses building project in Yugorsk and the project of wooden low-rise house-building factory by the “Nascor” technology in Megion. Average output of every factory is about 80 thousand square meters of housing a year, and the total output is up to 320 thousand square meters a year.

Experts say that currently in the Autonomous Area cities the projects concerning as punctiform as complex development of ground areas are being carried out.

Nevertheless judging the existing necessity in the Area the housing building rates are not high enough. The Yugra governor Mr. Alexander Filipenko is convinced that they should be at least doubled. Builders have the following task: not less than 950 thousand square meters of housing are to be commissioned this year.

In 2006 by means of the Autonomous Area budget and local budgets more than 60 social-cultural objects were commissioned including the sports – recreational complex and the covered swimming pool in Surgut, the art gallery and the ice-hockey stadium in Khanty-Mansijsk, the theatre in Nefteyugansk as well as hospitals, schools and kindergartens. It is planned to construct new social and cultural objects on the Autonomous Area territory in the future.

The Tyumen region real estate survey: Rapid development remains (Region: The Tyumen Region)

The Tyumen region has an extremely fast development and it is being accomplished in the same go-go way as well. During recent years intensive building has been carried out here, new sports centres, schools, cultural objects, modern pedestrian avenues appear in the cities and townships. The individual housing building amount grows. In 2006 the amount of commissioned individual housing was 40% higher than that of 2005.

In 2006 the amount of commissioned housing in Tyumen exceeded 506 thousand square meters – this number is 125% of the previous year mark. The Tyumen region building main office (BMO) deputy head Mr. Boris Roytblat says the city is going to reach the mark of 700 thousand square meters of housing this year.

263.1 thousand square meters of housing general area were commissioned during January-April of 2007. This number is 118.2% of the previous year respective period. The amount of commissioned housing reached 199.9 square meters of general area per one thousand citizens. This is the all-time record for the Ural Federal district. The Chelyabinsk region takes the second place on this mark and during four months of 2007 this region commissioned 89.3 square meters of housing per one thousand citizens. The Khanty-Mansijsk Autonomous Area is on the third place and the amount of commissioned housing in Yugra is 81.6 square meters per one thousand citizens.

The Tyumen region is also leader in the commissioned amount of individual housing. During January-April of the current year 86.6 thousand square meters of such housing general area were commissioned and this number is 130.8% of the recent year respective period. 65.8 square meters of individual housing general area were commissioned per one thousand citizens. The Chelyabinsk region (53.6 square meters per one thousand citizens) is on the second place on this mark, the Sverdlovsk region takes the third place – 36.3 square meters per one thousand citizens.

The Tyumen region BMO head Mr. Sergey Korobov says the region building field priorities are housing and municipal building, construction of public health and educational objects as well as building of objects within the frameworks of the national project “Available Housing” realization.

Experts note that one of the main trends appeared in 2006 at the Tyumen residential real estate market is a complex development. Building companies not only try to construct a building and accomplish the territory around. Now developers are interested in residential complexes when a number of houses are built at one territory, all the necessary infrastructure is constructed nearby, parking is also provided – in other words, all the conditions for comfortable living are created.

These market requirements appeared due to increased demands of the new housing buyers (between them there are many residents of neighboring northern regions where the housing situation is more complicated) who are able indirectly by one square meter cost pay for a fitness-centre, a shop, a bank department, parking and many other conveniences presence near the building.

The complex development of the Tyumen several districts was announced in 2006. The Tyumen holding “Sibintel” together with the building company “Renaissance Construction” began to build the residential complex “Daudel” in the very centre of the city near the trade entertainment centre “Goodwin”. Flats here are sold by “pools”, part of the flats is realized within the frameworks of the corporate sale: large companies buy housing for their personnel. During the year the residential complex “Daudel” administration changed the concept refusing from small flats in favor of larger area housing. The project coordinator Mr. Igor Mikhaylov thinks that currently the city centre has too many one and two-rooms flats and “Daudel” is not going to supply this market any more.

Developers of the residential complex “At Muravlenko” – branch of the Tyumen holding “Partner” the company “Partner-Invest” does not decline economic-class construction. The complex consisting of 18 buildings of different number of storeys and comfort will offer the Tyumen residents about 180 thousand square meters of housing. Every year the company intends to commission 50-60 thousand square meters. It is planned to accomplish territory, parking places, play grounds, social infrastructure within the frameworks of the project.

One more project is the complex development of the Tyumen microdistrict. The Tyumen largest developer the Tyumen homebuilding company carries out this project that will include not only buildings but also all the necessary infrastructure – schools, kindergartens, entertainment and sports objects. In 2006 the company commissioned about 139 thousand square meters of housing. It plans to build and commission not less than 140 thousand square meters in 2007.

Experts say the Tyumen housing price is from 40 to 55 thousand rubles per one square meter. The city head counselor for town building politics Mr. Oleg Buznikov thinks that the housing price growth will be 5-10% a month this year and it will stop only when the market is fully supplied.

Prospect of the Tyumen population amount growth is following: in 2005 the city had 600 thousand people, it is supposed that this number will be 650 thousand people by 2015 and up to 750 thousand citizens in 2025. The Tyumen region BMO first deputy head Mr. Alexander Sidorenko says the building rate will have the two times increase by 2010 – if the amount of commissioned square meters in 2005 was 557 thousand, in 2010 this mark is to be 1 119 thousand square meters.

They started to talk about the rural real estate development in Tyumen not a long time ago but currently developers offer the Tyumen residents several complexes and many specialists of real estate note that it is rural real estate that will very soon become the priority one not only for rich people but also for middle class.

”We will get in the nearest time compact developments from 50 to 300 separate standing cottages at individual sites within a radius of 10km from Tyumen. In the future starting from 2010-2012 the territories located up to 30km from Tyumen will be developed. As a matter of fact these areas are already being developed by individual builders, country houses and winter cottages are being constructed” – the nonprofit partnership “The Tyumen Realtors Association” president Mr. Sergey Sukharev notes.

The Chelyabinsk real estate survey (Region: The Chelyabinsk Region)

The regions of Chelyabinsk and Sverdlovsk are in the top ten of the housing construction in the state. Last year 1 million 234 thousand square meters of housing were commissioned in the region. This number is 2.5% of the total amount of housing commissioned in Russia. The Chelyabinsk region first deputy governor Mr. Vladimir Dyatlov says 1.4 million square meters of housing are planned to be commissioned this year. The task is set to commission 2 million square meters by 2010.

About 0.5 million square meters of housing were commissioned in Chelyabinsk in 2006. Nearly the same amount of housing is planned to be commissioned in 2007.

Currently according to statistics of the Federal State administration “Federal Licensing Centre of the Russian Federation Agency for Construction, Housing, Maintenance and Utilities ” Chelyabinsk branch over three thousand contract and building organizations are working in the region. With that 7-10 participants provide the main amount of the Chelyabinsk housing real estate market. In general these are the companies that have worked from the early 90-ties and they possess all the necessary equipment, finance and personnel to construct multi-storied buildings. According to data of the Chelyabinsk “DK-Chelyabinsk” magazine the field major leaders are Stroycom and the group of companies “Monolith”.

The state company “Monolith” representative Mr. Igor Schumann says the level of competition at the Chelyabinsk market of the housing building is not so high. In most cases the companies try to get areas for building and not clients. Developers have nearly the same prices for equivalent flats. The Chelyabinsk average price per one square meter of housing is from 35 to 50 thousand rubles.

Experts say the Chelyabinsk residents are getting more interested in low-rise building. According to statistics of London Consulting & Management Company (the company carried out the analysis of the low-rise building market) the design and construction of five new country townships with efficient area of about 612 thousand square meters began in the Chelyabinsk region in 2006 (nowadays the market amount is 44.5 thousand square meters).

Still there’s no any mass demand for country and rural real estate in Chelyabinsk. The OJSC “Quarter” director Mr. Konstantin Morozov says this market has just started to appear. On the one hand customer do not fully realize the advantages of such housing. On the other hand banks still seldom give mortgage credits to buy it.

The commercial areas demand in Chelyabinsk is much more higher than its supply. It has so fast growth that the building market is not able to have the same speed. And even construction of three large trade centres with one of them has already been opened can hardly bring any significant changes to the market of the commercial real estate.

The commercial real estate “E.R.A.” agency director Mr. Sergey Yeremeev says: “One million people live in Chelyabinsk. All the large trading companies have such million-class cities in their development plans. If a company has not come to Chelyabinsk that does not mean it will never come. The reason is currently it does not have suitable areas here.”

In 2007 experts forecast that the one commercial square meter price will increase. Still they hope that in the nearest two-three years trading areas will be actively built and it will let to have a certain balance at the commercial real estate market of the Southern Ural capital.

Currently the largest project in Chelyabinsk is construction of 22-storied trade-office center at the intersection of the streets Truda and Krasnaya (near the hotel Malachite). The state company “Monolith” intends to start its building in June of the current year.

The Yamalo-Nenets Autonomous Area real estate survey (Region: The Yamalo-Nenets Autonomous Area)

The Yamalo-Nenets Autonomous Area building complex is one of the most important industrial fields of Yamal. The Yamalo-Nenets Autonomous Area administration policy has been directed during the recent years to solve the priority tasks of building complex. It includes creation and development of the modern social infrastructure, construction of the high quality comfortable housing, increase of medical preventive objects number, building of schools, infant schools and cultural establishments, solution of the engineering accomplishment problems.

Last year 270 thousand square meters of housing were commissioned at Yamal. The mark for this year is set up to 300 thousand square meters.

As for all the regions of the Ural federal district the housing prices in the Yamalo-Nenets Autonomous Area had rapid growth during last year. Currently the price of housing one square meter is 35-40 thousand rubles.

The problem to provide the Autonomous Area population with housing is far from its solution. The Yamalo-Nenets Autonomous Area administration says that one of the main reasons of it is significant increase of capital development price connected with peculiarities of works in the Far North conditions.

Currently general plans have been designed and approved. These plans are combined with development plans of the cities Salekhard, Tarko-Sale, township Yar-Sale, township Tazovskiy, township Krasnoselkoop as well as villages Samburg of the Purovskiy district, Antipayuta, Gyda and Nakhodka of the Tazovskiy district. General plans of four cities are being designed and approved. These are Noviy Urengoy, Labytnangi, Gubkinskiy, Nadym and 25 townships of the Autonomous Area.

The Yamalo-Nenets Autonomous Area building and architecture department explains that when “ban for architectural extravagances” has gone every city has started to form its own look. Most objects are built by individual projects and much attention is paid to accomplishment problems that are very difficult in the Far North conditions.

The most significant changes during the last decade happen to historic settlements of the Area. Thanks to the numerous governor programs of the Yamal social – economic development the districts centres and the Area national settlements have been improved and the Area capital the city of Salekhard has become unrecognizable. Social objects are being built: schools, hospitals, maternity homes, kindergartens as well as communal services objects. The industrial enterprises technical re-equipment is being carried out.

The Yamalo-Nenets Autonomous Area largest building enterprises – OJSC “ISK YaNAO”, OJSC “Yamaltransstroy”, OGUP “Administration for Gas-Pipes Building and the Autonomous Area Gasification”.

Yamal hopes that mortgage lending and individual building will encourage the realization of the national project “Available Housing”. The Yamalo-Nenets Autonomous Area governor Mr. Yuri Neyolov said it in March of the current year at press-conference in Noyabrsk. “In 2007 we are planning to direct one and a half billion rubles for mortgage. At that we are introducing easy terms of lending and interest rates will be maximally lowered. If young families bear children a part of debt will be written off. We hope it will help many people to decide the housing problem” – the “North – Press” information agency quotes the words of Mr. Yuri Neyolov.

The Kurgan region real estate survey: Housing problem will be solved (Region: The Kurgan Region)

The Kurgan region as the other regions of the Ural Federal district increases the building amount. In 2006 the amount of commissioned housing in the region was 18% higher than the results of 2005. The total amount of money given for the housing building was 4.5 billion rubles.

Last year in the Zauralye capital by means of all the financing resources in general 75.19 thousand square meters of housing were commissioned. This amount includes 14 multiple flats buildings of area 56.5 thousand square meters and 133 individual residential premises of area 18.6 thousand square meters. Besides the reconstruction of 1.46 thousand square meters of non-residential premises into the dwelling buildings. In comparison with 2005 the growth of commissioned housing is 33.2%.

During the first quarter of the current year 24 787.5 square meters of housing have been commissioned. These are four residential multi-storied buildings (15 961.5 square meters) and 59 individual residential premises with total area of 8 thousand 826 square meters. As the city administration has said to the “UralPolit.Ru” newsperson it is planned to commission in the second quarter of the current year 25 thousand square meters of housing in Kurgan. 17-storied residential building and a 45-flats building society in the third microdistrict Zaozerniy as well as 10-storied residential building (KPD) in the Alexeyeva street will be commissioned.

According to the city administration information the Kurgan main developers are LLC “Sibirskiy Gazovik”, OJSC “SMU-KPD”, OJSC “Promstroy”, LLC “Investmarketingstroy”, LLC “PMK-752”, the Bascal individual entrepreneur and the Kurgan city UKS. But during recent years non-resident companies have come to the Zauralye market – from Tyumen (“Tyumenenergostroy”), Moscow (“Zhilinvest” and the Spealth corporation), Chelyabinsk (“Monolith”) and other cities.

It is worthy of note that large amount of old housing is a peculiarity of Zauralye. Thus more than 200 houses having the operation time limit in Kurgan do not meet any sanitary-engineering requirements. The region government has decided to offer investors constructible surfaces under the condition that the people from emergency housing will be resettled. This program has already worked. In Kurgan by means of individual investment developers in 2006 seventy five families were resettled and developers plan to resettle 82 families in 2007.

The number of Kurgan largest projects includes the entertainment objects complex in the city garden (the Omsk entrepreneur was interested in its building), the three-storied trade-entertainment centre of area more than 13 thousand square meters near the Yubileyniy shop which the local company LLC “Crimea” is going to commission in spring of 2008 as well as water park in the Zaozerniy microdistrict. According to preliminary calculations construction of the city first water park will cost 1.5 billion rubles. Foreign investors will be engaged in its building.

Building of the fourth “A” microdistrict Zaozerniy will encourage the decision of the Zauralye housing problem that is so important now. The company “Monolith-Kurgan” that is part of the state company “Monolith” (Chelyabinsk) started the microdistrict building on the first of June this year. Chairman of the Monolith board Mr. Eugeniy Rogoza says it is planned to increase the investment amount to 1 billion rubles per year during works on the Kurgan territory.

The Kurgan building market markup is relatively low: due to low income population the housing one square meter costs from 18.5 thousand rubles and the housing prime cost in all the regions is nearly the same. But the competition level in Kurgan is much lower. As Mr. Eugeniy Rogoza explained the company planned to win not by means of one square meter cost but by large amounts of its commission.

Total area of economic-class housing buildings and infrastructure in the new microdistrict will be 320 thousand square meters (it is a huge area for Kurgan – thus in 2005 only 57 thousand square meters of housing were built here). The building investment will be carried out by the bank loans of Sberbank, Gazprombank and VTB. The microdistrict construction is to be completed in 2012.

- Ella Koutovaya
Editor-in-Chief
First all-Russia analytical web portal - 1RRE.Ru