Compared with January 2023, demand for second homes in Russia declined significantly, with overall activity slipping by 29 percent. This shift was conveyed to socialbites.ca through information provided by Avito Real Estate, indicating a broad cooling in the secondary housing market. The data point captures a national trend that spans multiple regions and reflects changes in buyer sentiment, financing conditions, and the evolving landscape of property investments as households reassess affordability and long-term plans in a volatile economic environment.
The most pronounced drops in demand were concentrated in key metropolitan and industrial centers. Chelyabinsk posted a plunge around 44 percent, Moscow saw a decline near 43 percent, and Saratov approached a 42 percent reduction. The market in St. Petersburg also softened but to a lesser extent, with a decrease around 7 percent. These regional variances suggest that local economic dynamics, employment stability, and mortgage accessibility interact to shape how quickly buyers respond to shifts in pricing, credit terms, and the availability of suitable housing stock in different parts of the country.
According to Sergei Eremkin, who oversees the secondary and suburban segment at Avito Real Estate, the core driver behind the weakened demand is the rising cost of borrowing. Over the course of the year, the Central Bank of Russia raised the key interest rate from 7.5 percent to 16 percent, and corresponding mortgage rates followed suit. In such a climate, many potential buyers opt to rent rather than commit to a purchase, or pivot their attention toward new-build programs offering preferential terms. The appraisal underscores how monetary policy directly affects household choices, shifting some demand away from established homes to newer developments that may deliver incentives, longer-term payment plans, or government-supported mortgage programs intended to stimulate home ownership in a tighter credit environment.
The supply side of the secondary apartment market also contracted over the year. The most noticeable reductions occurred in Kazan, where listings fell by about 36 percent, and in Moscow and Nizhny Novgorod, each experiencing declines close to the 29–36 percent range. In contrast, the market for older stock in Krasnodar and Novosibirsk saw modest gains, with inventory increasing by roughly 9 percent and 7 percent respectively. This divergence points to a cautious approach among sellers, especially among those who prefer to rent out properties rather than liquidate at a loss under unfavorable financing conditions. The overall trend hints at a shift from ownership pressure to rental demand in many urban centers, coupled with a selective revival of supply in markets where conditions remain comparatively favorable for sellers who can wait for a more favorable pricing environment.
Analysts trace the broader slowdown to liquidity constraints, the risk premium attached to real estate holdings, and the hesitancy of buyers who must evaluate prospective mortgage terms against their long-term financial goals. With tighter credit, households increasingly weigh the immediate costs of homeownership against the flexibility of renting, and investors frequently reassess opportunities in light of higher loan servicing costs and the potential for rate volatility. The narrative also implies that some owners view rental income as a more reliable interim strategy than attempting to secure favorable terms for a sale, especially when market demand shows elasticity in response to interest rate shifts and macroeconomic signals. In this environment, the secondary market faces a gradual transformation, where property owners, lenders, and prospective buyers all adapt to the new normal of higher financing costs and altered expectations about price trajectories and time on the market.
Previously, industry experts highlighted the advantages of real estate investment as a hedge against inflation and a means to diversify portfolios. The conversation emphasized the potential role of rental yield, capital appreciation, and portfolio balance in the decision to pursue or defer property purchases. In tandem, many borrowers consider the reasons a bank might reject a mortgage, ranging from income verification and debt obligations to credit history and the stability of employment. These considerations underscore the complex interplay between lending standards, borrower profiles, and market dynamics that influence the accessibility and attractiveness of real estate as an investment strategy. As the market navigates these challenges, buyers and sellers alike must stay informed about policy changes, credit conditions, and regional variations that shape the path forward for the secondary housing sector in Russia.