Housing Prices in a Third of Russian Regions Experience a Decline

In recent developments, the Russian housing market has been experiencing a shift in trends. According to Vice-Premier Marat Khusnullin, the total volume of overdue mortgage debt in Russia reached 145.2 billion rubles by the end of the first half of 2025.

This surge in overdue mortgage debt coincides with a shift in demand towards new builds, which can be mortgaged under a preferential program. However, the current trend of falling prices in the secondary housing market is attributed to weak demand due to excessively high mortgage rates.

On the primary market, about 20% of Russian developers are currently at risk of bankruptcy, a situation that remains acute. Primary market housing buyers are facing difficulties with servicing their mortgages, a challenge that has been exacerbated by the previously accumulated effect of price changes after the increase in previous years.

In the secondary housing market, the regions experiencing a decrease in average prices per square meter include Kaluga Oblast, Krasnodar Krai, Murmansk Oblast, Tver Oblast, the Jewish Autonomous Oblast, the Republics of Kalmykia and Tuva, St. Petersburg, Adygea, Karelia, Astrakhan Oblast, Nizhny Novgorod Oblast, and North Ossetia. The most significant decreases were recorded in Kaluga Oblast (by 10% to 92,000 rubles), Krasnodar Krai (by 9% to 175,500 rubles), and Murmansk Oblast (by 5% to 84,000 rubles).

Sellers initially held prices, but then began to lower them due to the weak demand. The average discount level in transactions on the secondary market during the current summer has reached a record 6.5%.

On a positive note, regions such as Moscow, Saint Petersburg, and Novosibirsk recorded an increase in average rental prices per square meter in the secondary rental housing market compared to the first quarter of 2025, representing a 65.43% increase from the beginning of the year.

DK.RU also reported on the potential impact on developers and the increase in overdue mortgage debt. If demand continues to fall, this could affect up to 30% of developers, a concerning development for the Russian housing market.

It is worth noting that in 2024, secondary housing only became cheaper in 11 regions of Russia. In the second quarter of 2025, the average price per square meter on the secondary housing market fell in 27 out of 83 regions in Russia.

These trends underscore the challenges facing the Russian housing market, with both buyers and developers grappling with the effects of high mortgage rates and weak demand. As the situation evolves, it is crucial to monitor these trends closely to understand their implications for the broader Russian economy.