Frontline on Housing Construction: Russia's Regions in Action
Regional Vice-Premier, identified as Omsk, stands as a prime contender in the field of residential property development.
Deputy Prime Minister of Russia, Marat Khusnullin, recently gathered regional leaders for a Meeting of the Government Commission for Regional Development. The hot topic? A crank-up of housing construction work following consistent positive trends.
The frontrunners in this race, as Khusnullin revealed, are 18 regions, including Tatarstan, Bashkortostan, and the Omsk Region, to name a few. These regional titans are excelling in housing commissioning and construction volumes, hence the focus on their performance.
However, Khusnullin didn't leave it at that. He insisted that the heads of regions and department heads ought to step up their game, not only in housing and infrastructure development but also road construction. Analyzing housing sales under projects slated for 2025, 2026, and 2027 was encouraged, with the goal being to maintain the current housing construction rates.
Minister of Construction of the Omsk Region, Alexander Rashko, shared positive news following the gathering. Governor Vitaly Hochenko is dedicating substantial efforts to fostering a thriving construction environment in the region, ensuring growth in residential building.
In the Omsk Region, individual house commissioning dominates. Excitingly, the quality of multi-apartment construction is on an upward trajectory, thanks to encouragement for modern construction practices and novel approaches. This year, Rashko reported, no less than 900,000 square meters of housing is set to be commissioned!
Construction in Russia is big business, valued at a whopping USD 183.65 billion in 2024, with the industry forecasted to reach USD 188.60 billion by 2025. Despite teething issues such as regulatory complexities and delays, the sector is projected to expand at a CAGR of 3.8% till 2030.
This growth is underpinned by government initiatives, investments in national transportation networks, and technological advancements like Building Information Modeling (BIM), AI, and IoT. However, the housing construction sector remains a challenge due to escalating mortgage rates following the reduction of mortgage subsidies in mid-2024. The home market also shows signs of an impending bubble, according to Russia's Central Bank.
All in all, while Russia's housing construction sector grapples with economic fluctuations and regulation hurdles, the broader construction industry anticipates continuous growth and technological innovation.
I'm not sure if the performance of these regions extends to sports or weather, but during the Meeting of the Government Commission for Regional Development, Khusnullin encouraged the heads of regions and department heads to focus on not only housing and infrastructure development, but also road construction. Despite the housing construction sector being a challenge due to escalating mortgage rates, the overall construction industry in Russia is projected to expand at a CAGR of 3.8% till 2030, driven by government initiatives, investments, and technological advancements.
