The Russian government begins allocating funds to support the construction industry. The government decided to allocate 150 billion rubles for the purchase of finished housing from developers, 15.6 more billion rubles to subsidize mortgages and 185 billion rubles to co-finance the urban infrastructure construction until 2024.
The state-owned company Dom.RF managing the funds for the purchase of housing will be able to purchase up to about 3 % of all housing being built in Russia (around 3 billion m2).
“The purchase of housing from developers under current conditions will become additional support for those market players who cannot ensure the planned pace of sales due to the current economic situation, when demand declines due to the coronavirus pandemic,” says Dom.RF General Director Vitaliy Mutko.
The housing purchased by the state in new buildings should be standard-category housing (up to 100 m2) and should be commissioned before June 30, 2021.
Dom.RF will also manage the funds allocated by the Ministry of Finance to compensate commercial banks for the cost of securing a preferential rate on mortgage loans. The government has allocated 9.6 billion rubles to subsidize mortgage loans for families with children under three years of age and 6 billion rubles to reimburse banks for lost income on loans issued before November 1, 2020. The government expects mortgage subsidies to attract at least 900 billion rubles in housing construction.
In addition, the Ministry of Construction announced its intention to direct 185 billion rubles by the end of 2024 to finance the ‘Stimulus’ program under the national project ‘Housing and Urban Environment’. As per the terms of the program, the developer undertaking the integrated residential development project has the right to count on the financial support in providing the land plot with objects of social, transport, and engineering infrastructure.
The allocated funding for 2020 amounts to 31.3 billion rubles for 51 regions to expect the construction of a total of:
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69 highways;
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28 engineering infrastructure facilities;
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50 schools and 24 kindergartens;
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6 clinics.
