Russian Housing Market: Modest Growth Amidst Structural Shifts and Developer Challenges

Russia - Ekhbary News Agency

Russian Housing Market: Modest Growth Amidst Structural Shifts and Developer Challenges

By the end of 2025, the Russian housing construction market demonstrated a slight, yet symbolically significant, increase. According to Rosstat data, the total volume of housing commissioned reached 108.1 million square meters, representing a 0.4% increase over the previous year. This modest growth, however, conceals substantial structural changes within the industry, where Individual Housing Construction (IJS) emerged as the primary driver of development, while the multi-apartment building (MKB) sector experienced a noticeable decline.

Detailed analysis reveals that the positive dynamic was achieved exclusively through IJS, which accounted for an impressive 59% of the total commissioned housing volume. The commissioning of private homes increased by 2% year-on-year, reaching 63.5 million square meters. December 2025 was particularly noteworthy, with IJS showing a sharp jump of 2.5 times compared to the same period in 2024, reaching 4.1 million square meters. This impressive growth, however, is largely attributable to a low base effect: in December 2024, IJS commissioning plummeted by 74%, marking the worst monthly performance for that entire year. Nevertheless, sustained public interest in building their own homes, supported by government mortgage programs for IJS, continues to be a key factor in market stability.

At the same time, the multi-apartment building sector, traditionally the main indicator of activity for large developers, concluded 2025 with negative dynamics. MKB commissioning volumes decreased by 2% compared to 2024, totaling 44.6 million square meters. Despite a slight increase in December (+1.6% year-on-year, to 12.5 million square meters), the overall picture indicates serious challenges. Data from DOM.RF points to a 12% reduction in new project launches by developers in 2025, down to 41.3 million square meters. This reduction primarily affected projects with a planned commissioning date in 2027, which could signal a potential problem of supply deficit in the new build market in the near future, especially if demand begins to recover.

Anton Glushkov, President of NOSTROY, characterized the dynamics of housing commissioning in 2025 as “moderately positive and generally stable.” He noted that, despite tough financial conditions, rising construction costs, and subdued demand, the total commissioning volume showed growth, indicating continued activity in the industry. However, Glushkov emphasizes that a sharp market growth should not be expected in 2026. In his view, in the absence of macroeconomic shocks, further dynamics will be primarily driven by IJS, for which interest remains stable, as well as by individual MKB projects launched previously.

Projections for the multi-apartment building sector in 2026–2027 remain cautious. Anton Glushkov believes that this segment will remain under constant pressure from high project financing costs, cautious bank policies, and limited solvent demand. Most likely, the bulk of commissioned volumes will come from projects initiated in previous years, while the launch of new large-scale projects may remain limited. This creates a risk of slowing rates of housing stock renewal and a potential increase in prices for ready-made housing amidst limited supply. To stimulate growth in this sector, a comprehensive set of measures will be required, including stabilizing interest rates, expanding available financial instruments, and revitalizing demand through targeted programs.

Thus, 2025 marked a period of transformation for the Russian housing market. The shift in focus towards IJS and stagnation in the MKB segment require market participants and regulators to re-evaluate their strategies. Future development will depend on the ability to adapt to new economic realities, maintain mortgage accessibility, and stimulate investment in construction, especially amidst increasing competition for buyers and high costs.

Ekhbary News Agency