Approximately one-fifth of Russian programmers are on the brink of financial collapse, with the potential for this number to escalate to thirty percent.
In the ever-evolving landscape of the Russian housing market, a series of factors have contributed to a significant decline in revenue among top developers.
Marat Husnullin, Vice-Premier of the Russian Federation, has acknowledged the positive impact of new housing on the country's capitalization. However, he also believes that there is still room for growth in the construction industry.
The primary factors behind the revenue drop among Russian developers in the first half of 2025 are twofold. First, the end of the broad state-subsidized mortgage program in July 2024 led to a sharp increase in mortgage costs. Second, there has been a significant drop in housing sales. Conventional housing loans have nearly disappeared, with 80% of mortgages now issued under targeted government schemes and only 20% on market terms, where interest rates have soared above 25%. This has resulted in a 26% decline in new housing sales volume and a 16% nominal drop in sales revenue for developers nationwide. Major developers like YugStroyInvest, GK Tochno, and Setl Group have experienced revenue drops of 41-45%.
Other contributing factors include market tightening, with mortgage overdue payments growing substantially and sharp reductions in installment-based sales in the mass-market segment. The mortgage debt situation is also regionalized, with the Krasnodar region leading in mortgage debt increases.
Potential consequences for the Russian housing market include financial stress pushing about 20% of developers towards bankruptcy, an imbalance between supply and demand, and increased market stress. Despite these challenges, housing prices have generally not collapsed; ruble-denominated prices have risen by 6-9% on average across Russia, and more than 12% in Moscow.
The construction industry faces reduced investment, altered project priorities, and complications due to supply chain disruptions and foreign investor exit, which may limit the sector's capacity to respond rapidly to market fluctuations.
Marat Husnullin has expressed concern that if citizens do not continue to invest in real estate, the number of troubled developers will increase, and their share in the industry will rise above 30%. He also believes that without a systemic renewal of the housing stock, Russia may face the collapse of multi-apartment buildings.
By the end of the first half of 2025, the total volume of overdue mortgage debt in Russia has increased from 95 billion rubles to 145.2 billion rubles (+65.43% from the beginning of the year). If all development plans for mortgage programs are implemented by 2030, every fifth meter of housing in Russia will be new.
The volume of housing construction in Russia may decrease almost to zero by 2027. Builders in the Urals are forced to stop work on new projects due to very low housing sales. Negative sales dynamics were also shown by Razvitay, Etalon, Samoletok, A101, Level Group, and Bryusnika.
The government is considering introducing differentiation and "social justice" by the end of 2025. The single, "flat" interest rate for mortgage borrowers across the country may be changed and tied to the regional average wage.
In six years, 630 million sq. m of housing have been built in Russia. Russia's housing per capita is around 30 sq. m, while in Eastern Europe it's 35 sq. m. In progressive countries, it's 45-50 sq. m per person, in America it's over 60 sq. m, and in China, it's 41 sq. m.
Despite these challenges, the Vice-Premier remains optimistic about the future of the Russian housing market, emphasising the potential for growth in the construction industry.
[1] Source: https://www.kommersant.ru/doc/4670437 [2] Source: https://www.rbc.ru/economics/29/06/2025/5f1d526d9a7947684e4e451a [3] Source: https://www.vestifinance.ru/news/2025/07/23/467172328/ [4] Source: https://www.vestifinance.ru/news/2025/08/03/467205837/ [5] Source: https://www.vestifinance.ru/news/2025/07/27/467168182/
- The declining revenue in the Russian housing market has caught the attention of Marat Husnullin, Vice-Premier of the Russian Federation, who believes that there is still potential for growth in the construction industry, particularly in financing new housing developments through traditional business methods and investing in real-estate.
- Despite the significant challenges facing the Russian housing market, such as the rise in mortgage costs, reductions in housing sales, and increased overdue mortgage debt, Marat Husnullin remains optimistic about the future, highlighting the potential for growth in the construction industry.
- In response to the financial stress experienced by developers in the Russian housing market, Marat Husnullin has expressed concern that if citizens do not continue to invest in real estate, the number of troubled developers will increase, potentially impacting the overall health of the construction industry and the nation's capitalization.
