Russian Housing Market Continues to Collapse
Russia’s housing market is unraveling at accelerating speed, with official figures now confirming the worst half-year performance in recent memory. According to DOM.RF data, sales of new housing in Russia fell 26% year-over-year in the first half of 2025, with the second quarter showing a devastating monthly collapse: April (-25%), May (-40%), and June (-55%).
The trend is visible across all core indicators. Square meters of housing sold in June 2025 fell from 3.7 million in 2024 to just 1.7 million — a 53% year-on-year crash. This coincides with a visible build-up in unsold housing: new data from the United Developers Association shows massive oversupply beginning in July 2024. Over the next year, the gap between new housing projects and actual apartment sales grew to 319,000 units — a record glut, with quarterly overstocks rising to 72,000 apartments.
Despite collapsing demand, Russian developers continue launching new projects at a high pace. June saw the start of over 3 million square meters of new construction, according to monthly reports — nearly double the sales volume. This mismatch has been growing steadily: over 55,000,000 square meters of apartments in buildings under construction remain unsold, with that number continuing to climb.
Meanwhile, the housing finance system is showing signs of severe structural distortion. The share of subsidized mortgages reached 85–90% by mid-2025, according to Central Bank data, raising concerns about market artificiality. Although the volume of issued mortgages remains high, it is almost entirely driven by government programs — which analysts warn could become unsustainable if subsidies are cut.
Taken together, the data suggests that Russia is now in a full-fledged housing crisis: overbuilding, state-dependent financing, and a public increasingly unable or unwilling to buy. With military spending crowding out civilian budgets and real incomes squeezed by inflation and sanctions, the structural weakness of the Russian housing market is becoming impossible to mask.
The collapse of demand, growing oversupply, and artificial credit expansion are not just real estate problems — they are early warning signs of a broader systemic imbalance. If mortgage subsidies are reduced or the construction bubble pops, Russia could face a wave of bankruptcies across its real estate and banking sectors.
The housing market was once a stable pillar of post-Soviet economic growth. In 2025, it’s rapidly turning into a liability.
