Russia may face a significant housing shortage by 2027, potentially reaching a deficit of 30 million square metres, according to a report by DOM.RF, the government’s housing and development financing agency.
The anticipated shortfall is attributed to a sharp decline in new residential construction.
In the first quarter of 2025, new housing projects totalled only 8.1 million square metres, a 24 per cent decrease compared to the same period last year.
Experts predict this downturn will continue throughout 2025 if the Central Bank maintains its high key rate and sales remain sluggish.
Even if the Central Bank’s key interest rate decreases from the current 21 per cent to a potential 7.5-8.5 per cent by 2027, the Russian housing construction industry is unlikely to recover quickly enough to meet demand.
The conclusion of a subsidised mortgage programme in July 2024, which offered interest rates as low as 8 per cent, coupled with rising financing costs, has led developers to focus on smaller, high-margin projects, according to Anna Akinshina, CEO of real-estate company Samolet Group, as reported by Vedomosti.
The market is already feeling the effects of this slowdown.
DOM.RF reported 569,000 apartments sold nationwide in 2024, a 26 per cent decrease from the previous year.
Despite a current oversupply, experts warn that a housing shortage could occur by 2027, particularly in Moscow, its surrounding areas, and the Far East.
To mitigate the potential shortfall, DOM.RF has suggested subsidising loans for developers starting new housing projects in 2025 and 2026.
However, others argue that broader macroeconomic stability and a sustained reduction in borrowing costs are essential to restore equilibrium between supply and demand in the domestic housing market.
