As of April 1, 2024, the share of apartments in Russia that are bought, renovated, and resold reached 10 percent. Projections suggest this figure will climb to 38 percent by the end of 2024, according to Evgeny Shavnev, the general director of the real estate investment firm Flip. These numbers were provided to Socialbites.ca by Shavnev, highlighting a noticeable shift in how investors interact with the housing market.
Looking back, the trend shows a gradual rise in the practice of flipping. On April 1, 2023, the share of resold apartments stood at 6 percent, rising from 5 percent on April 1, 2022. The years 2021 and 2020 saw even lower levels, at 3 percent and 2 percent respectively. The escalation over the last few years underscores growing involvement by private real estate investors in the secondary market.
Shavnev notes that private investors have become increasingly interested in flipping. His description is straightforward: an investor locates a distressed apartment in the secondary housing market, often referred to as the grandmother’s option, purchases it, completes the necessary renovations, and then places it back on the market for sale. The typical markup on such properties ranges from 10 to 15 percent compared with the price at which the property was previously acquired. This model has gained traction as a relatively fast way to realize gains in a tight housing market, where many buyers face barriers to acquiring newly built homes.
According to the expert, these renovated flats tend to sell quickly, averaging about 30 days on the market. He sees substantial market potential for flipping due to its scale and the ongoing barriers many citizens encounter when trying to access primary housing. It is also noted that the share of non-renovated apartments in the secondary market remains significant at 20 to 30 percent, while roughly 60 percent of prospective buyers prioritize ready-to-moccupy homes with immediate move-in readiness and minimal additional investment.
Meanwhile, data from the National Bureau of Credit Histories indicate a restrictive lending environment for mortgage seekers. In 2024, about half of potential borrowers faced setbacks when applying for home loans. Andrey Loboda, the director of BitRiver Communications, did not rule out the possibility that the share of rejected mortgage applications could reach 60 percent by year-end, reflecting tighter bank underwriting policies. This context further explains why the secondary market and flipping are gaining attention in discussions about housing affordability and access to credit. The observation aligns with coverage from publications such as Newspapers.Ru, which highlighted evolving conditions for mortgage applicants and the consequences for buyers seeking financing.
In summary, the Russian real estate scene shows a clear tilt toward investor-driven activity in the secondary market, with flipping emerging as a practical strategy for many. The shift is underscored by rising percentages of resold, renovated properties and by growing acceptance of this approach among private investors. As banks adjust lending standards and more buyers seek immediate occupancy without further renovations, flipping could become a more common feature of the housing market landscape in the near term. The evolving dynamics warrant close attention from market watchers, policymakers, and anyone considering investments in residential real estate.