Post sponsored by

MIL OSI Translation. Region: Russian Federation –

The topic of the briefing is the results of the construction complex in 2020.

From the transcript:

Briefing by Marat Khusnullin

Question: Marat Shakirzyanovich, the outgoing year was your first as Deputy Prime Minister. How can you assess the results in the field of housing construction? What was the main thing for you, what did you manage to achieve, what tasks do you set for yourself for the next year?

M. Khusnullin: This year was very difficult for the construction industry – and especially for housing construction. The coronavirus has seriously affected the construction time frame. Some of the people were sick, some were limited in work, somewhere completely, somewhere partially. There were interruptions in the supply of materials. We felt an acute shortage of labor resources. Some of the migrants left and could not return.

When in April we saw that housing commissioning fell by 15-17% compared to last year, that mortgages decreased by 27-30%, we immediately predicted what great risks these are for the country. First, for the millions of people who are involved in shared housing construction. Because if construction stopped, and 43% of all apartments were sold at that time, then we would have hundreds of thousands more defrauded real estate investors. This is the loss of millions of jobs, taxes to the budget, disruption and imbalance of the entire industry.

Therefore, among the first anti-crisis measures, the first discussions with the President, we proposed a number of steps to save the industry. The key question was, at that time a difficult one – it was the reduction of the mortgage rate to 6.5%. You have to understand that this decision was very difficult. That is, we told people, developers, that for the entire period, whatever the rate of the Central Bank, the loan will be 6.5%. A person took for 15 years – no matter what the Central Bank rate, no matter what the loan rate, but he will pay no more than 6.5%. Thus, we made a commitment for the entire loan term, which is 10-15 years. It was not an easy decision. We have made a number of decisions to support developers, to compensate for interest rates, to support SROs, we have adopted a huge number of regulatory documents.

Summing up today, we can say that all measures have worked. Based on the data – 11 months of this year to 11 months of 2019, we have an excess of 1.4% in housing commissioning. That is, we have won back all the losses and are going with a small plus. In December, of course, there is a risk that due to lack of labor resources it will be somewhat worse than last year. But for the whole year, I can say that housing commissioning will be somewhere at the level of last year – a little less or a little higher. The statistics will be in February and we will already see the full picture. That we did not fail is already certain. It should be noted that 2019 was the highest year for housing commissioning – 82 million square meters. m was introduced. This was the most productive year in six years. That is, it was not a low base.

Of course, the working conditions during the crisis made us take a slightly different approach to business. We have changed our approaches. All meetings, meetings have moved mainly online. And this also led to a certain slowdown in the process. But we solved this problem in such a way that we began to conduct weekly headquarters with the governors. This is the know-how of this year. We reported this to the President and the President approved. At the meetings of the Government Commission for Regional Development, we communicate with each governor on a weekly basis. And many governors began to personally deal with these issues, to make financial and organizational decisions, which made it possible not to drop the huge industry.

Briefing by Marat Khusnullin

By the way, I received preliminary data for 11 months from the tax office and I see that the total amount of taxes on construction for 11 months of this year is even higher than last year. But at the same time, companies’ profits fell. That is, income tax and VAT increased, payments to social funds increased, but the profits of companies, of course, fell. This is also the price of a pandemic.

This year, another important decision was made, which, I believe, should be paid special attention to – we have reformatted the Housing and Urban Environment program. In general, I want to clarify that the process of housing construction, investment and construction process is very inertial and lengthy. Today, even to build a simple, average house – from idea to commissioning takes up to five years. As part of the national project, we want to build 1 billion square meters. m of housing (this is in the new program). Just to understand what a billion is: the country has 3.8 billion square meters. m of housing, of which 2.4 billion are multi-apartment.

To be continued…

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

MIL OSI Russia News