Real estate market index
The chart shows the Russian residential property market index in foreign-currency terms, since the rouble-denominated index continued to post moderate growth.
Average price per square metre
In rouble terms the average price per square metre is moving steadily upwards. The decline in the index is driven not by falling prices but by the rouble's exchange rate against the dollar.
Number of transactions
At the same time the number of transactions is predictably declining for the third year in a row, approaching 2018 levels.
Housing completions
In 2025 the volume of housing completions continued to fall. For balancing supply this is a favourable sign, but in the current situation it also entails delays in the delivery of projects that were due to be completed in 2025, which is a negative indication of the state of the market.
Mortgages
The surge in property demand in Russia that began in 2020 was based on state stimulus for the market through the subsidised mortgage programme. The chart shows the average mortgage rate across the total volume of mortgage transactions from 2014 to 2025.
Central bank rate
The spikes in the key rate to prohibitive levels in 2022 and 2024 had no significant impact on the average mortgage rate, because the overwhelming majority of mortgage loans were issued under the subsidised mortgage programme. This trend will persist until the key rate falls below 13%.
A comparison of the two charts clearly illustrates the divergence between the central bank rate and the weighted average mortgage rate. In practice, subsidised programmes remain the core of all mortgage lending.
Price per square metre
Sochi has joined the leaders by price per square metre. In the cities leading on price per square metre, the gap between primary and secondary market price levels is also wider, driven by the supply of new projects in the higher price segments.
Rental yield
The leaders on rental yield are the cities with populations above one million, where the price correction has pushed yields up. This trend should not, however, be regarded as long-term.
Residential property market
In the mass-market segments the property market remains under pressure because of the excessive volume of new project launches in 2021–2024. At present, the trend in transaction numbers and the rising share of unsold units in new developments point to a significant oversupply, which will result in prolonged stagnation in this segment.
In such conditions investment activity is typically redistributed towards the luxury segment, which is less sensitive to mortgage rate fluctuations and independent of state subsidy programmes. In 2025 Moscow's prime residential market showed positive dynamics, both in the volume of completed transactions and in price levels. The main growth drivers were strong solvent demand and structurally constrained supply in key locations. Growth was particularly marked in the de luxe category. Forecasts suggest the upward trend may continue in 2026, especially in districts with a shortage of new construction and consistently high demand. At the same time, given that prices have already been rising for three years, the scope for further expansion in this segment is close to exhaustion. This makes investment in prime property over the 2026–2027 horizon considerably riskier in terms of liquidity and the ability to subsequently exit the assets.
Prices and activity also rose in the premium and business segments. In the business class, however, a substantial share of transactions in 2025 was completed with the support of developer instalment schemes. This creates deferred risks: a significant number of buyers may prove unable to meet their financial obligations at the final stage, creating the conditions for an increase in distressed sales at handover. In such circumstances price pressure is likely to build on the secondary market, particularly in large-scale projects with limited liquidity.
The individual housing construction (IZhS) segment deserves separate mention. In 2025 it delivered weak results, both in the number of completed units and in the level of demand. This is due to the high cost of credit and reduced mortgage availability. Nevertheless, considerable pent-up demand has accumulated in the IZhS segment, and its release could begin in the second half of 2026, provided mortgage rates fall and macroeconomic conditions stabilise.
The structural transformation of the warehouse and logistics segments, triggered by the exponential growth of e-commerce in previous years, is drawing to a close. Already in 2025 demand for warehouse property fell substantially compared with 2024, and this downward trend is likely to persist in 2026. A systemic oversupply should not, however, be expected: amid high interest rates in 2024–2025, the volume of new project launches remained limited. The bulk of new contracts consisted of build-to-suit (BTS) deals tailored to specific tenant requirements.
The data centre segment, geared towards hosting artificial intelligence infrastructure, deserves particular attention. It represents a high-potential investment area in the context of the Russian Federation's structural advantages — in particular the high availability of generating capacity and competitive electricity prices. In this context the most attractive sites for investment are those in the immediate vicinity of power plants.
2026 will in all likelihood be a year of adjustment and difficult decisions for professional market participants. Against a slowdown in activity across several key segments at once, the attention of institutional investors may shift towards retail property. Demand for new space from retail chains in the major agglomerations remains high, and yields on commercial property in Russia are still at peak levels. This creates a window of investment opportunity: while private capital as a rule does not accept payback periods of more than 8–10 years, for institutional players such parameters fall within their target range. The aggregate capacity of this segment over the coming years is estimated at 50–70 billion roubles, which makes it significant from an investment standpoint.
Finally, the combination of market risks, financial volatility and geopolitical uncertainty will require investors to exercise a high degree of restraint, discipline and careful consideration of investment decisions in 2026. Any strategy for allocating capital to Russian assets should be based on a comparative analysis of alternative instruments and take account of liquidity and resilience to external shocks.
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