During his trip to St Petersburg, Prime Minister Vladimir Putin visited low-rise Novaya Izhora development, built for military servicemen.

The Prime Minister asked about the price per square metre of housing there, and was told by Defence Minister Anatoly Serdyukov that it was slightly over 44,000 roubles. The total area of a house is 128-136 square metres, the official added.

"We keep to the recommended price, but the problem is that the law allows the ministry to buy only flats for the servicemen, but not houses," the minister said. "If you stick to the price, the Government will lift the restriction," Mr Putin said.

Mr Serdyukov informed the Prime Minister that Novaya Izhora will provide homes to the navy and air force officers, as well as those serving in the Leningrad military district.

"It feels good here," Mr Putin said after examining one of the houses. He noticed that the residents will also benefit from a small plot of land, about 400 sq m. "It is not large, but one could plant a small garden here," he said.

He asked the Defence Minister whether the housing would be provided to the servicemen temporarily or permanently; the minister said both arrangements were possible. Mr Putin, however, said a permanent arrangement would be better as the spacious environment would encourage the families to have more children. That will improve the demographic situation, he added.

Sergei Podobed, president of Baltros (the contractor), in turn, complained to the Prime Minister of their lack of experience in building large low-rise projects. He also said that new technology was used to build the houses from wooden-frame wall panels, which requires one-sixteenth of the energy consumption in conventional panel construction. "That's a promising improvement," Mr Putin concluded.