The volume of completed apartment units offered for sale in Russia declined by 37 percent year over year, reaching the weakest level seen in the past five years. This assessment comes from the research conducted by the federal agency Etazhi, a copy of which is available to the editorial team at socialbites.ca.
Yulia Bocharnikova, the general director of the company, notes that many Russians have improved their living conditions in recent years thanks to accessible mortgage lending. Interest in purchasing homes remained high in 2023, driven by the removal of concessional rates in the primary market and the subsequent sharp uptick in loan costs.
In the previous year, activity on the secondary market cooled steadily from month to month, with the sole exception of October when listings rose slightly by 0.3 percent. The most pronounced declines appeared in August and December, with decreases of 6.1 percent and 7 percent, respectively. Etazhi analysts project that the reduction in available housing will persist through the first quarter of 2024, potentially reaching a 6 percent drop.
Bochar nickova adds that despite softer demand and persistently high mortgage rates under standard lending programs, there is a possibility that the number of apartments for sale could rebound in the second quarter with a growth of around 12 percent.
The housing market in Russia has been marked by a delicate balance between buyer affordability and the financial conditions set by lenders. When mortgage rates rise, prospective buyers face higher monthly payments, which can curb demand and slow the pace at which new properties are brought to market. Conversely, when credit access improves, more buyers enter the market, stimulating activity and encouraging developers to release more units.
Historically, the demand cycle in major cities has been more robust than in rural areas, with Moscow and St. Petersburg accounting for a substantial share of new apartment sales. Developers have often looked to these urban centers to stabilize inventories, even as overall supply from builders remains sensitive to macroeconomic trends and policy shifts.
Several market observers have highlighted the tension between the desire for home ownership and the reality of financing constraints. The trend noted by Etazhi suggests that while 2023 experienced strong interest, the subsequent tightening of credit conditions cooled the market in the second half of the year. This combination of factors has led to cautious optimism among industry players, who anticipate a potential uptick in supply and sales as lending conditions stabilize and consumer sentiment improves.
In addition to mortgage dynamics, the configuration of the housing stock and regional variations continue to shape the market. Some regions have seen more pronounced reductions in available homes, while others have managed to maintain a steadier flow of listings. The interaction between construction timelines, zoning policies, and local demand patterns contributes to the uneven distribution of supply across the country.
Industry insiders who discussed the market in prior months identified the Moscow metro area as a focal point for transactions. The most active metro lines and districts tend to attract higher buyer interest, influencing pricing trends and the pace at which new units are marketed. As developers monitor these shifts, they adjust pricing and incentives to remain competitive while working to clear existing inventories.