Experts See New Law Boosting Property
With the aid of an amended law on land distribution, experts from the construction industry hope to stimulate the residential market, which faces both a deficit of new projects and surging real estate prices.
At a round table at Interfax news agency last Thursday, experts said that local construction companies slowed down residential construction compared to the same period last year.
According to the St. Petersburg Union of Construction Companies, the offering of new apartments in the city this year decreased by 10 to 15 percent compared to its 2005 level.
From December through March, the average price increased from $1,034 to $1,134 per sq. m. The shortage in new residential premises will increase in line with the price growth, experts said.
“The current price growth is related not only to an increase in demand but also to the market’s shrinking,†Yevgeny Kaplan, vice president of Soyuzpetrostroi, said in a report on the construction market released Friday.
Since October of 2005, land for residential construction has been distributed through auctions which require comprehensive documentation. “During that six months, only 12 land plots were sold through auctions, which is 10 percent of the residential construction market’s needs,†Kaplan said.
Out of 36 land plots located in areas without housing infrastructure and offered for sale, only 8 were actually sold.
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