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- Variable exchange rate: the volume of investments in Russian real estate may be reduced by more than half
Variable exchange rate: the volume of investments in Russian real estate may be reduced by more than half
The level of investment in Russian real estate may decrease by almost half in 2025, from 1.29 trillion rubles a year earlier to 600 billion rubles. This is stated in the analytical materials of IBC Real Estate. How the volume of construction and the cost of real estate may change against this background is described in the Izvestia article.
Deferred demand
Investments in real estate directly depend on the cost of borrowing, Evgeny Mironyuk, an expert on the stock market at BCS World of Investments, recalled in an interview with Izvestia. Although the demand factors for residential and commercial real estate are different, there is a general trend of slowing investment.
— For example, according to DOM.In the Russian Federation, 143 thousand mortgage loans were issued in the first quarter (51% less than in the first quarter of 2024) in the amount of 611 billion rubles (-42%, YoY). Mortgages have become a commodity in the individual housing construction (IHS) market. And although its share is relatively low in the total volume of loans, the drop was 80% in physical terms (10,000 new loans) and 74% in monetary terms, the expert said.
On the positive side, Yevgeny Mironyuk noted the formation of pent-up demand: buyers rely on the Central Bank's forecast to reduce the average key rate in 2026 to 13-14% on average for the year. When the appropriate levels are reached, the market expects a return in investment, including in commercial real estate, in the wake of economic recovery and the release of significant funds locked up in deposits and investment accounts.
At the same time, the volume of construction, according to him, reflects a long investment and construction cycle. By the time the construction of the newly opened projects is completed, the rates in the economy should decrease, according to the forecast of the Central Bank.
— According to DOM.Since the beginning of the year, the volume of new supply in the residential real estate market has amounted to 12.4 million square meters, only 18% less than in the same period last year. At the same time, in April, developers launched 4.3 million square meters. The number of new projects is only 2% less than in the same period of 2024, which indicates the positive expectations of developers regarding future demand, he believes.
In 2025, Russia can overcome the target of 110 million square meters of commissioned housing, Evgeny Makarov, marketing director of the development company UNIKEY, told Izvestia. At the same time, it was previously reported that in 2024, the volume of housing starts in Russia decreased by 2.4%, amounting to 107.8 million square meters. m.
- 2025 is likely to be a period of "moderate optimism": builders will increase their volumes, but you should not expect a drastic reduction in the cost of real estate," he believes. — Developers will strive to maintain the marginality of projects, which may limit price reductions, especially in segments with a shortage of supply. Ultimately, everything will depend on the balance between state support, the Central Bank's rates and effective demand," the Izvestia source points out.
Comparative analysis
If we look at the volume of investments in previous years, during their peak values, the decline can now be called an average stable decline due to a number of objective factors, Natalia Kazantseva, associate professor at the Department of Economic Policy and Economic Measurements at the State University of Management, told Izvestia.
— Among the main reasons are an increase in the key interest rate, a drop in demand due to consumers' choice of a savings strategy associated with increased deposit rates, and the loss of their interest in investing money in real estate as a "savings book," she noted.
Investment stagnation is taking place in the economy and in other sectors, but for the construction industry, according to the expert, such a drastic change is most dangerous, since the synergetic nature of its activities can negatively affect other industries. That is why the government is likely to continue to attempt to subsidize preferential mortgage loans in the field of housing construction.
— Developers should diversify their business. Housing construction is being refocused on the end user rather than the investor. Investments will continue to be aimed at commercial real estate, where demand has not fallen as much as in the housing sector, Natalia Kazantseva said. — They will rather be used to purchase sites for future construction. The regional investment profile will also change. It is more likely that the investment structure will change in anticipation of significant macroeconomic changes in the country, rather than their further decline.
It is obvious that construction volumes are falling, Valery Tumin, director of the Russian and CIS markets at fam Properties, told Izvestia. In 2024, developers received half as many building permits as a year earlier. The trend will continue in 2025. According to Urban Award analysts, less than 50% of developers have planned the commissioning of new facilities this year at all.
Pre-sanction indicators
Against the background of the decrease in the price of the "square", it is worth noting some activity of transactions using own funds, Evgenia Murinets, a teacher at the IGSU Presidential Academy, noted in an interview with Izvestia. As a rule, these are particularly large transactions for facilities that have already been built or are in the final stage of construction. This applies to both housing construction, office and administrative, commercial and warehouse construction. These indicators can be indirectly perceived as the vision of large companies to return the market to pre-sanctions indicators in the medium term.
— The monetary policy aimed at reducing inflation, expressed both in a high "key" and in strengthening the ruble, has a direct impact on the construction complex. The second, of course, is a consequence of many factors, including international politics," the expert believes. — In general, we can say that the "fat" years of the 21st-23rd for the construction complex, due to the "lifeline" thrown by the regulator in the form of cheap mortgages, played an important role in their time and brought developers out of the deep "covid" crisis, allowing, on the one hand, to obtain high profits for the industry, on the other hand. to "inflate" prices to a level where housing affordability has reached a historic low.
In his opinion, the current situation with the rate and exchange rate today can be described as the state regulator's groping for a "fair" balance between supply and demand, which should result in an optimal level of inflation and real estate prices. So together, looking at the historical dynamics and current challenges, we can conclude that it is unlikely that the price of a meter will decrease in absolute terms, but it will not outpace inflation in the next year or two either.
According to analysts at the Aeroplane Group, many developers in the current market conditions are postponing the start of new projects to a later date, which led to a 12.3% reduction in new volume output last year. Due to the limited new supply, residential property prices will continue to rise, rising by 5-6% on average per year. The volume of apartment building commissioning decreased by 12.1% in 2024 (by 2023), and by 13.8% in the first 4 months of 2025. By the end of 2025, it is expected to further reduce the volume of commissioning to 15%.
Izvestia sent a request to the Ministry of Construction, DOM.RF, PIC, and LSR, but no response had been received at the time of publication.
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