The housing market in Rostov-on-Don, a million-plus city in one of the most rapidly developing Russian regions, is an essential driver behind the diversification of the Company’s business.
The Rostov Region is among the largest in Russia — it is the sixth biggest region by the number of permanent residents. According to the Russian Federal State Statistics Service, the population of Rostov-on-Don has increased since 2016 by 1.5% to reach 1.14 million people. Household incomes are growing at a much faster pace: average salaries in the city went up by 29.3% to RUB 52.5 thousand over the same periodFrom January to September 2021..
Rostov’s housing market expands in step with the household incomes, with prices demonstrating progressive growth. Over the past three years, the price per sqm of fitted-out properties in the region’s primary market rose by 67%. In 2021, the price for new properties in the city increased by an average of 43.7%.
A marked supply-demand gap is an additional driver behind price growth: by the end of 2021, the spread reached 27%.
The share of mortgage sales in Rostov is fairly high. In 2021, it came in at 55%. The housing market in Rostov-on-Don gained further traction from the extension of the subsidised mortgage programme to 1H 2022 and the advancement of joint mortgage plans offered by developers and the r partner banks. The efforts by the Russian government to bolster target housing programmes for select population groups (including the maternity capital programme) also had a positive impact on the market.
From 2018 to Q1 2022, the weighted average price per sqm of comfort, business and standard-class properties increased by 124% to RUB 106 thousand, by 99% to RUB 131 thousand, and by 70% to RUB 81 thousand, respectively. One-bedroom apartments with a floor area of 30–40 sqm enjoy the strongest demand (40% of the market).
In 2021, INTECO’s share of the primary housing market in Rostov-on-Don came in at 6.2%.