Real estate market experiences declines in specific areas, impacting property values.
Housing Market in Russia Exhibits Complexity in 2025
Amid tightening mortgage subsidies, developer financing practices, and macroeconomic instability, the Russian housing market shows signs of stagnation with selective regional growth in 2025. The Bank of Russia anticipates a slowdown in new project launches and a continued focus on finishing existing buildings, with a decline in new housing launches observed in major regions such as the Moscow region, Moscow, and St. Petersburg.
Economic Uncertainties for Developers
Despite the Central Bank expressing minimal concern for mass bankruptcies among developers due to the tightening of monetary policy, individual companies with high debt loads may confront difficulties, according to Elizaveta Danilova. These challenges, however, are not expected to create a systemic crisis. The Bank of Russia forecasts that developers will primarily complete already started buildings in 2025-2026 and may resume new project launches more actively as interests rates decrease and demand recovers.
Financial Caution Advised for Homebuyers
Elizaveta Danilova recommends that potential homebuyers exercise financial prudence, carefully planning their finances and avoiding unaffordable purchases, particularly those involving installment plans. She warns that buyers who rely on installment plans may face risks associated with payment difficulties, potential project delays, and developer bankruptcies. In such cases, buyers may lose the already-paid installments, and there is a possibility that approved mortgages may result in unaffordable monthly payments.
January-February 2025 witness a 23% reduction in new housing launches compared to the same period the previous year, with 4.5 million sq.m. introduced to the market. This decrease is attributed to the significant increase in new housing launches in the previous year, with 48 million sq.m. entering the market.
Market Prospects and Advice for Buyers
Looking forward, the market is projected to continue its stagnant state, with selective price increases in supply-constrained cities and ongoing reliance on discounts and installment plans. Demand may decrease by 5–10% in 2025 but could modestly recover in 2026 if mortgage rates fall to 12–15%. In the long term, a shortage of new builds may push prices up by 10–15% in major cities like Moscow and St. Petersburg, while other regions may remain stable or experience price declines of 5–10%, depending on regional supply and demand dynamics.
Homebuyers are advised to exercise caution when using installment plans, consider alternative transactions for better security, and focus on regions with strong demand and limited supply for better long-term value. Securing a mortgage has become more challenging and expensive, but opportunities may still arise for buyers with strong credit and stable income as market conditions evolve and new lending programs emerge.
By the editors of Expert Mag, this information can also be found in our Telegram channel @expert_mag.
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- As homebuyers in Russia contemplate purchasing real estate in 2025, they should exercise financial prudence and avoid installment plans due to the risks associated with payment difficulties, project delays, and developer bankruptcies.
- Owing to the anticipated slowdown in new project launches and a continued focus on completing existing buildings, the Russian housing market may experience a stagnant state, with selective price increases in supply-constrained cities and ongoing reliance on discounts and installment plans.
- Concerning personal finance, it is recommended that individuals refrain from making unaffordable purchases, particularly those using installment plans, given the unpredictability in the real estate market in 2025.
