Experts reveal strategies to address housing needs amid high interest rates.
A year has passed since Russia`s widespread preferential mortgage program ended. During this period, the real estate market underwent significant transformations, largely to the detriment of consumers. Housing loans became more expensive, demand plummeted, credit issuance sharply declined, and the number of buyers noticeably decreased. The primary market is losing clients, sales are falling, yet square meter prices continue to rise.
Photo: AGN «Moscow»
MK News asked experts to evaluate the changes in the housing market over the past year and its near-term outlook. Participants in our online conference included: Konstantin Aprelev, founder of the Russian Guild of Realtors; Konstantin Barsukov, advisor to the president of the Moscow Realtors Guild; Alexey Krichevsky, real estate market analyst and author of the «Economism» project; and Olga Magilina, head of the suburban real estate department at VSN Group.
«Demand Decline Across the Board»
— A year has passed since the preferential mortgage program concluded. What is the current situation? How have housing demand and prices been affected?
Magilina: — To understand the market`s state, it`s best to examine it by segments. Over the past year, mass-market segments (economy and comfort) saw an approximate 45% increase in demand. The business segment remained largely stable. In contrast, premium and luxury segments experienced significant fluctuations: a record 20% growth in the second half of 2024, followed by approximately a one-third decline in the first half of 2025. Developers, encouraged by previous success, also increased supply in these segments by a third. Consequently, the premium market is particularly intriguing to observe right now.
Aprelev: — The new-build market was hit hardest, especially after the broad preferential mortgage program was abolished. The secondary market began its shift to market conditions about nine months prior. By the first half of 2024, a noticeable drop in demand was evident, despite market efforts to boost sales. The reason? Most primary market purchases are funded by secondary market sales. If transactions decline there, funds simply don`t reach new developments. As a result, despite efforts from developers and banks, 2024 proved weaker than 2023. Actual transaction prices in the primary market haven`t increased for 8-9 months, indicating direct stagnation.
The luxury market pretends everything is fine, but in reality, the situation mirrors the mass segment. Falling transactions and tax optimization distort the true picture. We hear «growth in luxury!» – but these aren`t sales; they`re technical asset redistributions. Overall, demand has decreased everywhere, by 40-60% across regions. Even family mortgages aren`t a full solution. While issuance volumes remain, high rates and limited budgets often force borrowers to combine family mortgages with market-rate loans, making purchases unfeasible for many.
Krichevsky: — I`ll present the raw statistics. For the first half of 2025, there were 227,000 new-build sales. In 2024, it was 315,000, and in 2023, 258,000. In terms of value: 2 trillion in 2025, 2.6 trillion in 2024, and 1.8 trillion in 2023. This translates to a 28% decrease in volume and a 12% decrease in monetary terms year-over-year. The average apartment price in 2025 was 9.7 million, in 2024 it was 8.2 million, and in 2023, 7.1 million. The average price per square meter was 205,000, 176,000, and 148,000 respectively.
Despite this, developers` profit margins have increased; in monetary terms, they earned approximately 20% more than in 2023. Costs are rising faster than inflation, so it`s inaccurate to claim that «everything is bad.» The situation promises to become even more interesting, especially considering the rush before the preferential programs ended. In June 2025, 2.2 trillion rubles were issued in family mortgages, while market-rate mortgages amounted to only 44 billion. People were anticipating a cut in the key rate, but for most, it was more profitable to invest in deposits or bonds rather than take on expensive mortgages. Externally, there was a frenzy; internally, fear and anticipation prevailed.
Barsukov: — Indeed, when assessing the current situation, one must consider the high base effect. June 2024 saw a record in new-build mortgages issued. The reason was uncertainty surrounding the family mortgage program, prompting people to rush to secure loans. Developers, for their part, are adept at adapting. They manipulate supply by withholding some apartments from the market, creating artificial scarcity. Prices may appear higher, but this increase is often linked to the construction stage. If a building is nearing completion, its price will be higher, but this doesn`t necessarily indicate overall market growth.
Furthermore, developers artificially reallocate resources: pausing work on one construction site to complete another, as finished properties sell better. With government support (such as moratoriums on penalties), they gain greater flexibility. Family mortgage restrictions are now being discussed again: if approved in September, December will likely see another surge in demand, followed once more by «promotions,» «discounts,» and price increases.
— What about the suburban real estate market?
Aprelev: — The situation with suburban properties is less optimistic. March saw a surge with active transactions, but interest abruptly collapsed from April onwards. Spring is traditionally considered the season for country real estate, but this year, demand plummeted severalfold. Even ready-built properties garnered zero interest. While some projects might be genuinely successful, the market as a whole is experiencing stagnation. Secondary market prices for suburban homes have dropped by approximately 30% compared to last year. Completed houses have been particularly hard hit, with May showing a complete absence of inquiries. June brought a slight revival, but it quickly faded.
The issue is that suburban properties are either second homes or alternatives to city apartments. However, deciding to move outside the city is complex: transportation, infrastructure, schools, and medical facilities all need consideration. Not everyone is prepared to sell their apartment to buy a house in the countryside. Thus, demand is localized and short-lived. For instance, in March 2025, the number of suburban property transactions nearly doubled last year`s level — and that was the extent of the «revival.»
Magilina: — The March surge was directly tied to mortgages. People were trying to secure loans under the old terms. They acquired suburban homes, including those under construction—some purchased land, others contracted building services. Then, in late winter and early spring 2025, a large number of constructions were completed, leading to property handovers and transactions.
The secondary market in the suburbs, however, reacted sharply. In the Moscow region, the volume of properties listed for sale nearly halved. The reason is simple: with prices in the new-build suburban market rising (by 30%), secondary market sellers cannot afford to maintain the same price level, so they simply withdraw properties from sale. This means the market has stalled not due to a lack of interest, but due to a price imbalance.
Barsukov: — The main issue with the secondary market is overvaluation. Across the country, sellers, especially in the suburban segment, have inflated expectations. They value properties not based on market worth, but on their investments, emotions, views from windows, fences, or «designer renovations.» As a result, suburban properties either remain unsold for years or require negotiations with discounts up to 50%. For example: a plot in a ravine, half of which is practically unusable, but the owner demands 4 million, while its market price is 1.5 million. It has been on sale for four years. First, there was a 15% discount, then 20%, now 40%… This isn`t an isolated incident; it`s happening en masse.
What is actually being bought in the suburban secondary market today? A new, high-quality, ready-built house, and only if priced adequately. Everything else remains unsold. In the primary market, there is interest, but it`s largely tied to family mortgages. If a property qualifies for it, people buy it. Most often, this involves land for construction, or homes at the foundation or first-floor stage.
«Save, Don`t Buy»
— For a long time, renting was considered unprofitable, with mortgages being the preferred option. However, housing loans have now become unaffordable, leading more people to choose renting. What is currently happening in the rental market?
Krichevsky: — I rent my own accommodation. And frankly, even with a decent income, I wouldn`t consider a mortgage at current rates. Rent is just over 100,000 rubles per month, while a mortgage for the same apartment would be 400,000 rubles per month. There`s no logic to it. Five years ago, it made sense: mortgage rates at 8%, the key rate at 6%, and prices 30% lower. Mortgages worked then. Now, they don`t.
Here`s an example. An apartment advertised at 12 million rubles, realistically 11 million if discounted for urgency or cash payment. With a standard down payment and a typical 20-year term, the monthly mortgage payment would be around 180,000–200,000 rubles. Rent for a similar property is 50,000–60,000 rubles. That`s a three to four times difference. I can easily invest that difference at 18% per annum, or even find 20-25% if needed. In a year, that`s a significant capital gain. And rates might drop, at which point it would make sense to reconsider the strategy.
This is precisely why rental demand is increasing. People are forced to switch to renting. It`s not a «fashionable» trend; it`s simply a matter of economics.
Aprelev: — Yes. It`s a matter of rationality. Those who can calculate and don`t succumb to emotions come out ahead. Few are venturing into mortgages right now. Yes, some are taking out loans at 21–22% annual interest, even with a one percent drop in the key rate. But even then, a mortgage is 4–5 times more expensive than rent.
Here`s a simple calculation: if a renter pays 4–5% annually of a property`s value, while a mortgage holder pays 22%, the difference can be invested monthly. This builds capital faster than the debt repayment grows. As long as inflation hasn`t accelerated, renting is cheaper, deposits are more profitable, and buying is a long-term commitment.
The housing loan market will recover when expectations shift. We`ve already seen the first wave: when the key rate decreased, mortgage rates dropped by 6–7 percentage points. If the Central Bank cuts the key rate two more times before September, for example, a second wave of demand might emerge. However, there`s nothing to anticipate before autumn.
Barsukov: — An important point: even if the Central Bank doesn`t lower the rate, I expect secondary market prices to rise by about 10% by year-end. Why? Psychology. Even without accessible mortgages, the market will sense activity, and sellers will raise prices based on «expectations.»
However, mortgages won`t become more affordable. The Central Bank won`t allow cheap loans to fuel inflation again. But psychologically, the market will revive.
As for renting, people would gladly live in their own apartments, but physically cannot afford to. And here`s what`s interesting: if this high-interest-rate situation persists for another 5–7 years, the population`s behavior model itself will change. People will start saving instead of buying. A savings-oriented approach will become the norm. And then the rental market will also transform—becoming more stable and predictable. Not out of a preference for renting, but because there`s no other way to live.
— Among preferential programs, family mortgages remain in effect. But what if they are prohibited from being taken outside one`s registered place of residence? The Ministry of Finance supports territorial restrictions, arguing that preferential mortgages shouldn`t be issued where one doesn`t reside. Will this trap young families between expensive urban agglomerations and economically depressed regions? What should one do if they want to live in one place but a mortgage is only affordable in another?
Barsukov: — When the Federation Council voiced the idea of linking family mortgages to residence registration, they likely relied on inaccurate statistics—claiming that 40% of families buy homes outside their registered address. This is difficult to precisely quantify. If the goal is to prohibit investment purchases, then what constitutes an investment needs clarification. When someone buys an apartment for their child`s future or for their own retirement, is that also an investment? If this proposal is adopted, people will simply start buying registration, which isn`t difficult.
Krichevsky: — Discussing the purchase of residence registration is absurd; it`s a criminal offense. The initiative itself is unclear: does it refer to temporary or permanent registration? If temporary, it`s merely a formality. There were ideas to expand family mortgages: for children under 18, for teachers, for families of SVO participants… But everything comes down to a lack of funds. It`s not certain that the family mortgage program, in its current form, will even be retained. It might be curtailed—this is evident from broader budget and tax decisions.
Aprelev: — I am confident that such a decision will not be adopted. Millions of people in our country live and work in different regions from where they are registered. Linking mortgages to registration would create numerous problems without solving any. People would simply resort to purchasing fictitious registrations. If the goal is to restrict purchases outside a specific region, then a viable market needs to be created there. Currently, 70% of potential buyers cannot use mortgages because nothing is being built in their regions. A ban on mobility would devastate the labor market. Why can`t individual housing construction (IHC) on the secondary market be purchased? Why only new homes? All these measures create artificial barriers and push people to hastily take out mortgages, even at unfavorable rates, before further restrictions are imposed.
Magilina: — It`s important to consider that Moscow and its surrounding region are distinct entities. If territorial restrictions are introduced, Moscow residents won`t be able to buy a house in the Moscow Oblast using a family mortgage. This would be completely absurd.
«The House is Still Under Construction, But One Needs a Place to Live»
— Suppose a family wants to improve their living conditions: they lack sufficient square footage, children are growing up, and more space is needed. What options are currently available for such families?
Magilina: — For those who can utilize a family mortgage, it`s probably advisable to do so now. If there`s an opportunity to restructure assets, sell something, and buy a home, this is also a good moment. While the market hasn`t fully become a «buyer`s market,» it is moving in that direction. In the future, the supply in the mass segment might worsen, so now is not the worst time to make a deal.
Aprelev: — I agree: a family mortgage is a reasonable alternative to renting in terms of monthly payments. The main thing is to have a down payment. It`s also crucial to prepare effectively for negotiations with the developer. Don`t just read reviews; compare their offers with already constructed homes, and check prices for properties in completed projects. If a neighboring completed building is cheaper than one under construction, that`s a strong argument for negotiation. Developers clearly aren`t seeing an abundance of buyers right now.
If considering a property exchange, that`s also a sensible tactic. One can take out a mortgage for a new home, then sell their existing property and repay the loan. The price difference might not be critical, but you`ll already be living where you desire. The market is currently stable, allowing for calm selling and buying without fear of missing out due to price increases. A mortgage can expedite the transaction—a reasonable approach, especially if a suitable option has been found.
Barsukov: — Family mortgages have a unique aspect: the house is still under construction, but you need somewhere to live. This is a problem. Most people buy for «the future»—not for immediate residence, but for children or as an investment. Half of all purchases are one-bedroom apartments or studios. Various tools are often used to expand living space, such as installment plans from developers; however, these should be approached with caution.
If you`re selling an old apartment and want to buy a new-build, one option is to make a minimal down payment, take an installment plan until the house is completed, comfortably live in your current place, then sell the apartment, live in a rental temporarily, complete renovations, and move in.
Sometimes, people sell an apartment, place the money in a deposit, rent accommodation, and after six months, buy a better property than they initially could have afforded. One should be more cautious with this now—deposit rates have decreased, but if you have a place to stay, you might still profit from price differences.
Krichevsky: — People often forget that buying a home isn`t just about the apartment price. An additional 20–30% of the property value will be needed for renovations, furniture, appliances, and temporary rental accommodation while waiting. These are real costs that must be factored in.
Every situation is unique. If a child is born, there`s an urgent need to expand, regardless of other factors. Mortgages are a tool, as are installment plans. However, trade-ins (a scheme where an old apartment`s value is credited towards a new one) are not the best option: you could lose 20% of the value, especially if dealing with the developer`s «partners.»
If there are no special circumstances, I would generally advise against rushing a purchase when relocating. Rent accommodation in the area or city you`re considering. Live there for six months to see if you like the infrastructure, social services, and environment. If it doesn`t suit you, you`ll only lose on rent. If you buy and then become disappointed, the losses will be far greater. The approach should be cautious, tailored to the specific life situation.
