Vadim Fidarov, Government Relations Manager, Wooden Housing Construction Association: “Private housing projects are a market of cut-throat competition”

The segment of Russian wooden housing construction has been growing actively over the past few years. In that time, wooden structures have been used in a greater share of private housing projects, according to industry experts. The market was additionally heated by COVID-related restrictions in 2020. After they were lifted, the demand for building private homes in the countryside started booming among the population. As soon as in 2022, however, market players were reporting a decline of the demand.   

WhatWood Agency talked to Vadim Fidarov, Government Relations Manager at Wooden Housing Construction Association, about the current state of the Russian market of wooden housing construction, the role played by mortgage loans in various construction segments, the most efficient applications of industrialized wooden housing construction, the estimated share of the “under-the-counter” market of private housing projects, the time when construction of multi-storey wooden houses will begin in Russia, and much more.

Please tell us about the Wooden Housing Construction Association. What companies are its members?

Wooden Housing Construction Association unites the industry’s most active companies. It currently has about 80 members: not only construction and production firms but also adjacent businesses, like producers of paints, varnishes, protective coatings, and hardware; architects, designers, as well as universities, colleges, and research organizations.

Members of the Association can take credit for all major initiatives aimed at promoting and developing wooden housing construction in the domestic market.

What is your opinion of the situation in the Russian market of wooden housing construction after 9 months of 2022?

It is really varied. This year, we have conducted three sample interviews of experts, so we can draw some tentative conclusions.

As of September, the volume of orders in the high-price segment at least halved and in some cases dropped by 60 – 70%. The decline in the economy and comfort class segments ranges from 20% to 70%.

It should be noted that some companies have the same volumes as last year but they are more of an exception. We generally register a decline in the market.

Why do you think the construction of timber frame houses dropped even in the economy segment?

The demand for consumer loans is the highest in the economy segment: over the past year, the number of mortgage-funded construction transactions increased. So clients in this segment are very sensitive to the key interest rate and the ruble exchange rate.

Besides, the special military operation, the partial conscription, and the sanctions imposed by the West naturally affected our economy and the behaviour of both entrepreneurs and the population. Uncertainty makes people less willing to take loans and for some customers, this means postponing construction until better days.

Read more: Russian Timber Journal 09-2022.

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