Residential property sales plummeted by 40%
Russia's Housing Market Faces Significant Decline in Sales
Russia's residential property market has experienced a steady decline in sales, with a 12.3% drop in March 2025 and a 39.8% decrease in April, compared to the previous month. The downturn began in February.
One of the main drivers behind the growth in premium and luxury housing sectors is contributing to the continuing market trend. Prices for premium-class apartments increased by 57.4% over the past year, while an increase of 24.5% was observed in the luxury segment. Conversely, the comfort-class segment witnessed a mere 0.1% rise in prices.
Investment in the construction of new housing units has dropped by 50% compared to the same period in 2024, with a decline from 179 billion rubles to 90 billion rubles.
Director for Development at "Dвижение" Radik Nigmatullin noted that the market, in its current state, is unlikely to see significant improvement soon. He attributes this to the limited effectiveness of the mortgage programs currently offered on the market, with the exception of the IT mortgage program which operates with varying degrees of success across different regions. For instance, Yekaterinburg saw an increase in sales in April due in part to the IT mortgage program, given the city's concentration of IT companies.
Vladimir Pinaev, CEO of CORE.XP, expressed confidence that authorities would support large-scale developers. However, he noted that the market is consolidating, with smaller developers merging with larger ones.
Alexei Popov, head of "Циан.Аналитики," believes that reversing the current situation may depend on several factors, including a possible reduction in the central bank's key interest rate, the expansion of affordable mortgage programs, and positive macroeconomic and geopolitical news.
President Vladimir Putin instructed the government and the Central Bank to take measures to reduce the risk of construction sector bankruptcies. He requested the development of a temporary program to subsidize mortgage rates for developers, particularly those involved in the Project Financing Mechanism for Residential Construction in smaller cities with a planned completion date for projects in 2026.
With these trends and projected government measures, a potential increase in apartment sales from February to May 2026 may be influenced by several factors:
- Lower mortgage rates might stimulate demand and potentially lead to an increase in sales.
- Ongoing discounts on new buildings may continue to attract buyers.
- The anticipated recovery in demand, while modest, could signal a gradual improvement in the market.
While the market is expected to stabilize, significant increases in sales are unlikely without further substantial government measures or improvements in economic conditions.
The ongoing decline in Russia's housing market sales might prompt investors to look towards other sectors, such as finance or real-estate, seeking potential opportunities for growth. Despite President Vladimir Putin's instructions, the current mortgage programs may not be enough to spur a significant increase in sales in the housing market, especially without further substantial government measures or improvements in economic conditions.
