What is happening in the new construction market?
The federal real estate company Etazhi reports that the average price per square meter for primary housing in Russia rose by 1% since July and by 2.2% since January, reaching 121,285 rubles. Alexei Popov, head of Cyan.Analytics, noted that in August Russians mostly purchased new apartments around 48 square meters. This means the typical new home in a house under construction now costs about 5.8 million rubles. In many cities, the most popular regional housing varies, but Cyan.Analytics indicates Moscow averages 48 square meters, St. Petersburg about 41 square meters with prices near 14.3 million rubles, and Novosibirsk at roughly 50 square meters around 6.1 million rubles.
Analysts expect prices in new buildings could climb another 5 to 7 percent this autumn due to inflation and higher construction costs, according to Vladimir Shchekin, a developer in the target residential cluster. A separate consideration is the purchasing power of buyers, which may cap how sharply prices rise.
Demand for new apartments is projected to stay strong in the fall. Shchekin also suggested that financing for new builds and apartments could become less favorable, with the cost of ownership loans likely to almost double, pushing some buyers toward options in the under‑construction segment. Sergey Zaitsev, Etazhy’s Sales Director, observed a surge in activity among buyers of new homes in August, with mortgage consultations up by about 40% in the first half of the month.
Loan program terms for buying homes in new buildings remained unchanged even after the Central Bank raised the key rate by 350 basis points to 12% per year on August 15. Socialbites.ca ranks among the top fifty Russian banks by assets. The majority of lenders (VTB, Post Bank, Tinkoff Bank, Otkritie, Rosbank) did not alter concessional mortgage conditions for new housing. Absolut Bank cut rates slightly while Rosbank increased them by about 1.5 percentage points.
Government programs continue to dominate the primary market with maximum rates set by the state. Despite the Central Bank’s move, the parameters for family, preferential, and other programs stayed the same. Sovcombank chief analyst Natalia Vashchelyuk reaffirmed that the marginal rate for a family mortgage sits at 6 percent, and 8 percent for a preferred mortgage, with no fall adjustments expected in the autumn for primary market borrowing.
What is developing in the secondary market?
Etazhi reports that the August average price per square meter in the secondary market across Russia stood at 114,543 rubles, up 0.7% from July and 3.9% from January. Popov notes that in August the most popular size was about 54 square meters. Consequently, the typical price for a secondary market home is around 6.2 million rubles. The average per‑square‑meter price for finished housing is about 303,232 rubles in Moscow, 192,015 rubles in St. Petersburg, and 111,128 rubles in Novosibirsk.
Experts say prices in the secondary market rebounded after a spring dip in 2022, driven in part by emotions around the first rate increase. Buyers rushed to secure mortgages on old terms, and sellers took advantage of the market excitement, according to Ruslan Syrtsov, Managing Director of Metrium.
Now, ready‑made apartments are expected to be cheaper, but demand may not rise due to higher mortgage costs. Etazhi notes that mortgage consultations for secondary housing rose by 15% in August, but this is still far below the level seen for new buildings. After the central bank decision, borrowing costs for housing rose by about two percentage points. Rosbank led a rise of 1.5 percentage points, while VTB, Otkritie, and Absolut Bank increased their rates by around two points. Post Bank and Tinkoff Bank did not disclose a specific threshold.
Experts caution that purchasing activity could decline. Syrtsov notes that new market mortgage rates are becoming prohibitive for many buyers. Some owners may delay sales, while those who must move quickly might offer substantial discounts. Borrowers may seek cheaper options, such as smaller units farther from the center or with fewer repairs, and many may postpone final keys from developers to wait for better terms in the construction segment. In any case, sales in the secondary market are likely to slow.
Vashchelyuk suggests that a time may come when profitable resale or rental options appear in the secondary market. Valery Yemelyanov, a stockbroker with BCS World of Investments, argues that speculating on price movements is unwise. Rents in Russia are typically cheaper than mortgages, and that gap is likely to widen. From a financial perspective, rental housing will be more economical, and buying on credit may lead to losses if resale prices do not keep pace with interest. If a mortgage is pursued, it is prudent to choose the region, city, district, and residential complex carefully to avoid illiquid assets and overinflated properties.