Decrease in apartment sales in Russia reaches 40%
Russian Residential Real Estate Market Registers Significant Decrease in Sales
Sales of residential property in Russia experienced a steep decline of 39.8% in April compared to March, according to a recent study. The downturn in transaction volumes started as early as February, with a reduction of 12.3% in March.
Analysts attribute this trend to the cessation of subsidized mortgage programs and the increase in bank interest rates, resulting in more buyers opting for installment plans, which currently account for 54% of all deals.
Ekaterina Lomteva, director, and head of residential real estate at CORE, shared her insight, stating, "The market has been seeing a steady decline in transaction volumes since February. Buyers are hesitant, hoping for an improvement in the geopolitical situation and the expansion of family mortgage programs. The strengthening of the ruble also encourages a cautious approach."
The study indicates that the trend of decreasing market activity is likely to continue into May. However, segments of premium and luxury class apartments continue to show growth. Over the year, prices for such properties have risen by 57.4% and 24.5% respectively, while the comfort class segment has shown a negligible increase of only 0.1%.
As a consequence, investments in residential construction have seen a substantial decrease since the beginning of the year, compared to the same period in 2024, falling by 50%, from 179 to 90 billion rubles.
The overall picture portrays a residential real estate market enduring a combination of stagnation, high prices, and shifting access to financing, particularly after pivotal changes in government-backed mortgage programs. The reduced demand, along with the dependence on government support and the potential for external factors to influence the market, indicates that the road to recovery may be long and challenging.
- In light of the current situation, investors might find more opportunities in the premium and luxury real-estate segments, as prices for these properties continue to rise, despite the market decline.
- Given the decrease in residential construction investments and the uncertain geopolitical situation, financing in the Russian real-estate market may become a critical factor for investors to consider when making their decisions in the field of investing.
