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Housing construction in Murmansk Region is more expensive than elsewhere in the North

According to the region's Deputy Minister of Construction Alexey Grachikov, last year's estimations show that the cost of building 1 square meter is by 20-40% higher than in Karelia and the Leningrad Region

MURMANSK, May 17. /TASS/. The cost of building 1 square meter of housing in the Murmansk Region is by 20-40% higher than in other regions of the North-Western Federal District, the region's Deputy Minister of Construction Alexey Grachikov said.

Earlier, the region's Governor Andrey Chibis said the cost is about 110,000 - 120,000 rubles ($1,400 - 1,500) due to the materials' logistics and complex soils - rocks and sedimentary soils of the glacial origin.

"As for the cost of building 1 square meter, last year's estimations show it is by 20-40% higher than in Karelia and the Leningrad Region," the deputy minister said. "In fact, we have rocks on the surface - the Baltic Shield."

If the preferential program of mortgage loans at 2% APR becomes effective in the Russian Federation's Arctic regions, it will stimulate the construction and will attract big developers to the Murmansk Region, he added.

"We often have meetings with potential developers. As a rule, the key issue is they cannot understand what the demand would be. If a person knew the monthly payment would be lower due to the lower rate, then the potential demand could be much higher. We understand as very important the opinion, shared by the authorities and potential developers, that a product like the Arctic Mortgage, similar to the Far Eastern Mortgage program, could stimulate the construction," he continued.

In the Murmansk Region, he said, preferential mortgage loans could be of demand among people resettling from emergency housing, or among young specialists, or highly demanded teachers and medical specialists, as well as the military and their families.

About Arctic Mortgage program"

In mid-April, Russia's Deputy Prime Minister and the presidential envoy to the Far Eastern Federal District Yury Trutnev said the authorities had been considering to expand the option of 2% APR mortgage loans, used in the Far East, to the Arctic. The Ministry for Development of the Far East and Arctic said this would require additional expenses, which to 2035 will make some 11.6 billion rubles ($147 million).

Earlier, Deputy Minister of Construction Nikita Stasishin said the construction potential in the Russian Federation's Arctic Zone is 897,000 sq m, and as of April 1, 2023, construction licenses have been issued for about 36,300 sq m.

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