Russia’s primary housing market has sharply contracted: in February, apartment sales fell 1.5 times to 1.6 million sqm, according to Dom.RF. Developer revenue dropped by a third to 333 billion rubles. Year-on-year, the decline is evident in both floor space (-13%) and monetary value (-11%).
Family Mortgage Crisis
The primary driver of the collapse was the tightening of “Family Mortgage” terms. Due to new restrictions, mortgage lending volumes fell by 40% in February (to 285 billion rubles). The developers’ heavy reliance on state subsidies led to an immediate demand drop following the cuts.
End of the Cheap Money Era
The housing market has reached a deadlock: without state support, current prices are unaffordable for most citizens. High interest rates and reduced subsidies are forcing developers to find new survival models, threatening the stability of the entire construction sector.