Comprehensive development and preserving historical surroundings as new trends in urban development
The PROESTATE.Live International Real Estate Investment Forum opened on 10 September with a session entitled Housing Economy – Quality of Life Economy, in which participants discussed trends affecting residential construction and urban development. Urbanization is on the rise and cities are growing, making it important to ensure sustainable development. The event was organized by the Roscongress Foundation, the Ministry of Construction, Housing and Utilities of the Russian Federation, the Academy of Real Estate (ARE), and IMMERGITY.
10.09.2020
In different countries, issues surrounding the development of cities and urban spaces are being tackled in various ways. However, a number of principles remain the same throughout. In particular, the speakers highlighted the need to preserve the historic environment, and not merely focus on construction. The importance of developing cities and urban spaces was also emphasized. Among those sharing their experience related to sustainable development were Tadashi Matsumoto, Head of the OECD's Sustainable Development and Global Relations Unit; Jiang Wanrong, Deputy Minister of Housing and Urban-Rural Development of the People's Republic of China; and Yousef Ahmed Baselaib, Executive Director of Masdar's Sustainable Real Estate Division and Abu Dhabi's flagship sustainable urban community, Masdar City.
Director of the Russian Ministry of Construction's Housing Policy Department Olga Kornienko spoke of the importance of balancing the development of spaces.
Senior Development Advisor at the Ministry for Ecological Transition Yves-Laurent Sapoval drew attention to the difficulties associated with developing and modernizing spaces while preserving the historical and cultural value of existing structures.
This was a point supported by Alexey Raskhodchikov, Deputy Director for External Communications at Mosinzhproekt. Raskhodchikov claimed that the main transport projects in Moscow have already been completed, and the Russian capital will continue to lead the way in urban development for the next 10–15 years: "Moscow's period of intensive development is coming to an end. A period of qualitative change is now beginning. But this will not be a fast process. For Moscow and other large cities, it will encompass multifunctional projects, involving residential spaces, infrastructure, and the environment... Unfortunately, there are not many of them. The second area involves preserving the historical environment."
The qualitative development of living spaces marks the next step in urbanization. For example, in Uzbekistan the construction of multi-storey residential buildings is on the rise. According to First Deputy Minister of Construction of the Republic of Uzbekistan Sherzod Khidoyatov, around 1,500 multi-storey residential building projects were commissioned in 2018–2019. Construction is also under way on individual projects. "These projects are not generic. They involve private developers who are constructing residential buildings according to individual designs," he said.
The introduction of government support measures for people in need of better housing has facilitated a transition away from the construction of predominantly luxury housing towards the mass market.
The Russian government has also been successful at solving issues surrounding demand, without which the market would be unable to grow. According to Olga Kornienko, the government was wary of a decline in residential construction following a major reformation of the industry. However, this did not come to pass, and in fact the industry grew at a stable rate in the period leading up to the pandemic.
The government also introduced a range of additional measures to support the construction industry to mitigate the effect of the pandemic. In particular, a moratorium was granted to developers who had been fined as a result of being unable to fulfil their obligations in time. Kornienko noted that this measure had had a positive impact. In addition, a mechanism was put in place to subsidize interest rates to match the key rate on loans for developers. And an aid programme for low-margin projects was also put in place in a number of regions where low housing prices have impacted profits.
Mortgages continue to be the main driver of demand. "You could build the most wonderful apartments imaginable, but if people don't have the means to buy them, they would count for nothing. A range of mortgage programmes are in place to help shore up demand. The main one provides mortgages at 6.5% annual interest. This has been a fantastic incentive for buyers, and the programme is in great demand. We are currently considering whether it will be possible to extend it, but no decisions have been taken as of yet.
"In addition, there are a range of mortgage programmes for average interest rates and a credit programme for individual housing projects, including for acquiring land. Mortgages in the Far East are available at 2% annual interest, and the programme has already proved to be effective. And the current measures also include support for young families, as well as a restructuring of building societies," said Kornienko.
Developers expressed their desire for these programmes to be extended.
PROESTATE.Live's partners include Mosinzhproekt (official partner), ANT Development (partner), YugStroyImperial (partner), A101 Group (official session partner), Colliers International Group Inc. (official session partner), and Cushman & Wakefield (session partner).
Official website of the event: proestate.ru/en
Director of the Russian Ministry of Construction's Housing Policy Department Olga Kornienko spoke of the importance of balancing the development of spaces.
Senior Development Advisor at the Ministry for Ecological Transition Yves-Laurent Sapoval drew attention to the difficulties associated with developing and modernizing spaces while preserving the historical and cultural value of existing structures.
This was a point supported by Alexey Raskhodchikov, Deputy Director for External Communications at Mosinzhproekt. Raskhodchikov claimed that the main transport projects in Moscow have already been completed, and the Russian capital will continue to lead the way in urban development for the next 10–15 years: "Moscow's period of intensive development is coming to an end. A period of qualitative change is now beginning. But this will not be a fast process. For Moscow and other large cities, it will encompass multifunctional projects, involving residential spaces, infrastructure, and the environment... Unfortunately, there are not many of them. The second area involves preserving the historical environment."
The qualitative development of living spaces marks the next step in urbanization. For example, in Uzbekistan the construction of multi-storey residential buildings is on the rise. According to First Deputy Minister of Construction of the Republic of Uzbekistan Sherzod Khidoyatov, around 1,500 multi-storey residential building projects were commissioned in 2018–2019. Construction is also under way on individual projects. "These projects are not generic. They involve private developers who are constructing residential buildings according to individual designs," he said.
The introduction of government support measures for people in need of better housing has facilitated a transition away from the construction of predominantly luxury housing towards the mass market.
The Russian government has also been successful at solving issues surrounding demand, without which the market would be unable to grow. According to Olga Kornienko, the government was wary of a decline in residential construction following a major reformation of the industry. However, this did not come to pass, and in fact the industry grew at a stable rate in the period leading up to the pandemic.
The government also introduced a range of additional measures to support the construction industry to mitigate the effect of the pandemic. In particular, a moratorium was granted to developers who had been fined as a result of being unable to fulfil their obligations in time. Kornienko noted that this measure had had a positive impact. In addition, a mechanism was put in place to subsidize interest rates to match the key rate on loans for developers. And an aid programme for low-margin projects was also put in place in a number of regions where low housing prices have impacted profits.
Mortgages continue to be the main driver of demand. "You could build the most wonderful apartments imaginable, but if people don't have the means to buy them, they would count for nothing. A range of mortgage programmes are in place to help shore up demand. The main one provides mortgages at 6.5% annual interest. This has been a fantastic incentive for buyers, and the programme is in great demand. We are currently considering whether it will be possible to extend it, but no decisions have been taken as of yet.
"In addition, there are a range of mortgage programmes for average interest rates and a credit programme for individual housing projects, including for acquiring land. Mortgages in the Far East are available at 2% annual interest, and the programme has already proved to be effective. And the current measures also include support for young families, as well as a restructuring of building societies," said Kornienko.
Developers expressed their desire for these programmes to be extended.
PROESTATE.Live's partners include Mosinzhproekt (official partner), ANT Development (partner), YugStroyImperial (partner), A101 Group (official session partner), Colliers International Group Inc. (official session partner), and Cushman & Wakefield (session partner).
Official website of the event: proestate.ru/en