More than half of all investments in Russia are in real estate. At the same time, in the past 10 years, the average size of apartments in new apartment blocks in Russia has been shrinking, while the average amount of floor area per person has gone up by 14%. Analytical Center experts have studied the trends in residential housing construction and in the real estate market during the economic downturn.
Availability of housing in Russia still remains lower than in developed countries
More than half of all investments in Russia are in residential housing (15% of all investments in 2015) and non-residential buildings and structures (41%), with the share of residential housing having been growing steadily since 2010, according to the latest bulletin on the socio-economic crisis in Russia published by the Analytical Center. The construction sector in Russia has effectively been in recession since H2 2013 when the general stagnation in investments became obvious, the bulletin notes.
The average size of apartments in new apartment blocks in Russia got smaller in the past 10 years from 69 square meters to 56 square meters in late 2014, the bulletin stresses. The average apartment size has thus fallen by 19%.
The maximum average size of single-family houses ended up being twice as large in floor area as that of apartments (138 square meters). It was reached between 2004-2007, at which point it began to fall as a result of the financial crisis, getting back to 135 square meters in 2012-2014, a size that may very well be viewed as optimal by most people, the study notes. Thus, the average living floor area of single-family houses in Russia is already 2.4 times greater than the average size of apartments in apartment blocks.
“The growth in the residential housing sector has been accompanied by a process of social stratification: the inequality between the size of single-family houses and apartments has been growing,” Alexander Golyashev, an Analytical Center expert commented on the situation.
Another trend that Analytical Center experts took note of was growth in the average amount of floor area per person. Between 2005 and 2014 the average floor area per person grew 14.3%, reaching 24 square meters.
On the whole, availability of residential housing in Russia remains far lower than in most developed countries, the study notes. It is only 1.5 times higher than immediately after the collapse of the USSR and three times lower than in the US (in the US it is 70 square meters per person; in Germany and France it is 39 and in Poland it is 25). “In order for housing availability in Russia to hit 35 square meters per person, the amount of residential housing construction in the country needs to increase by a factor of 1.5. And if we take into account the amount of housing that needs to be built to replace run-down and obsolete housing as well as housing that lacks basic amenities or that is in dangerous state of repair, the amount of residential housing construction that needs to be taking place in Russia today must be 70-80% of the currently available residential housing,” Mr. Golyashev explained in an interview for a RIA Novosti correspondent.
For details see the Residential Housing Construction and Real Estate Market during Economic Recession bulletin.
Other issues of the bulletin on the social economic crisis are available in the Publications section.