VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Transcript of the beginning of the meeting:
Vladimir Putin: Please go ahead, Mr Basargin.
Viktor Basargin: Mr Putin, I would like to report on the preliminary results of housing construction in 2008. We have gathered information from 80 regions and the figures indicate that we have built 61.4 million square metres of housing. This is slightly more than last year. As you remember, this was about what we expected then. Rosstat's figure is a bit higher.
Vladimir Putin: You mean the overall result for 2008 in relation to 2007?
Viktor Basargin: Yes, I do. But after discussing anti-crisis measures with the Economic Development Ministry we decided together to raise this figure to 65 million square metres in 2009.
You may remember that we proposed building 54 million square metres of housing as part of the Your Home programme and the related national project. In GDP terms, this will save us something like 1.5% to 1.8% of the invested funds and ensure budget revenues of 400 billion roubles.
Now about this year: figure-wise, the final intervention made last December taught us a small lesson. Together with the Defence Ministry, we planned to buy around 15,000 flats on the market, but purchased only 3,000.
Vladimir Putin: Why is that? You received the funding, didn't you?
Viktor Basargin: We did.
Vladimir Putin: And despite the available funds you purchased less than planned. Why?
Viktor Basargin: The first reason was the prices.
Vladimir Putin: You mean to say the construction companies are refusing to lower the prices?
Viktor Basargin: Yes, they are. The real estate market is virtually frozen. Everyone is waiting for the prices to fall, and this has given rise to a sort of stand-off: The construction companies are not reducing prices, while the buyers are waiting for them to fall, and for that reason are not purchasing housing. That is the first cause.
In 2009, we propose abandoning the practice of fixing prices on a quarterly basis and adopting it regardless of its average value. Our research shows that the housing market in Russia is becoming established in pockets throughout the country.
Vladimir Putin: Good, Mr Basargin. And what do you propose?
Viktor Basargin: Our proposal is that the average price be fixed by the capital of each region. Let it be a little higher. We consider it could be by a factor of 1.3. This would encourage supply on the housing market.
Vladimir Putin: The main thing is to prevent some outfits looking to make a quick profit from pocketing unearned money. They will be only too happy if prices are raised as much as you like. The point is that this price should be fair and realistic in today's market. I understand that construction materials used to be bought at higher prices, but that was in the past. These are the risks that the state is not obliged to take.
Viktor Basargin: Even the factor of 1.3 gives us the 2008 price. The resultant average price is slightly over 28,000.
Vladimir Putin: Thrash the matter out with the companies. I repeat once again - it must be a price acceptable to the state and fair for profit-making organisations. But without any windfall profits. Because we remember how the construction market functioned in previous years. Clearly, profits were very high in those days, but now we are not obliged to guarantee the same rate of profit as in former years. Now our duty is to help them survive and at the same time to address social issues. Finding a consensus is a must.
