In the second quarter of 2023, Russia reported 101 million square meters of residences under construction, a peak not seen since the onset of the pandemic in March 2020. This figure comes from Frank Media, based on data from the Central Bank. The statistics highlight a surge in new project launches by developers this year, even as a large stock of housing remains unsold. The regulator notes that the unsold area rose to about 67 million square meters, signaling a growing oversupply risk in the market and a potential downward pressure on real estate prices if this imbalance persists.
Industry analysts forecast that after a brief summer revival, housing market activity could ease again in the autumn of 2023. CIAN, a leading industry publication, suggests that prices for newly built homes in major Russian cities have risen by roughly 2 percent in the last month, despite ongoing demand migration away from the primary market. This price movement underscores a complex dynamic: robust construction activity coexists with pockets of weakening demand and shifting buyer preferences toward more affordable options or alternative financing.
The Central Bank stresses that the accumulation of these imbalances could lead to a pronounced correction in housing prices and a squeeze on affordability for many residents in the short term. At the same time, state-backed institutions remain active in shaping the credit landscape. In early August, DOM.RF announced a record level of concessional mortgage issuance, a development that reflects continued policy intervention aimed at supporting homebuyers amid market volatility. Yet experts warn that the preferential loan regime carries its own set of risks, including potential distortions in demand and pricing if incentives are not carefully calibrated.
Overall, the latest data paint a picture of a market at a crossroads: construction momentum remains strong, new housing starts are rising, and mortgage support remains a key policy tool. How these factors interact with consumer demand and financing conditions will help determine whether housing prices stabilize, adjust downward, or rebound in the months ahead. Analysts emphasize watching unsold stock levels, price trajectories in major cities, and the effectiveness of concessional financing as key indicators for the near term outlook. (Source: Frank Media; Central Bank data; DOM.RF commentary)