2013 housing construction plan is a faint hope to dip into household savings
On November 29th, a housing construction meeting took place in Minsk.
In 2013 the housing construction industry is tasked to increase housing construction by 50%. Concessional lending has been limited. The populations’ effective demand for housing is limited, which makes the housing industry performance indicators difficult to fulfill.
In 2012, the construction industry has been tasked to build 4,200 thousand sq.m. of housing. In early November the plan was implemented by 87.1%. In 2013, the plan is to build 6,500 thousand sq.m. of housing. Over the past 17 years, only in 2010, the construction industry has been able to build the amount of housing projected for 2013.
In order to fulfill the plan the housing construction industry requires BYR 37.3 trillion, including BYR 10 trillion in concessional loans. It is projected, that the population will input BYR 23.3 trillion. In 2010, with the construction of 6.630 thousand sq. m. the population funded only about one third. Most of the construction was carried out at concessional loans’ cost.
In Minsk in 2013 it is projected to build 1000 thousand sq. m. of housing worth circa BYR 9 trillion. There is no sufficient effective demand for property at such price per sq. m. even taking into account BYR 1.6 trillion from concessional lending. In the regions, despite the lower housing costs, financing of the housing construction mainly from population funds is not feasible, because of lower incomes and reduced attractiveness from the investment point of view.
Thus, without a substantial increase in concessional lending, the housing construction plan for 2013 will not be implemented because of the limited resources of the population to finance the housing construction. Therefore, due to budget’s limited financial capacity, it would be the most reasonable to adjust the 2013 plans downwards.