Dependence on russia May Ruin belarus’ Real Estate Market

The residential real estate market in belarus in 2025 is a classic example of price dysfunction that has nothing to do with fundamental economic indicators. Demand for housing has fallen by about 15% – a level that under normal circumstances would inevitably lead to a correction in prices. Instead, the opposite has happened: the average dollar price per square meter has risen by 20–25% amid a sharp drop in the number of transactions.

In minsk, the volume of purchases fell by 13.3%, while prices rose by 17.5%. Brest saw a 12% drop in transactions with a 16% increase in prices, and gomel saw a 16% drop in transactions and a 24% increase in prices. The worst situation is in grodno: the number of transactions plummeted by 34%, while prices soared by 35%. These are not signs of a stable market, but symptoms of an artificially inflated bubble.

The current market configuration is a direct consequence of external shock, not internal development. International sanctions have forced belarusians to urgently seek ways to preserve their savings. Real estate became a forced substitute for financial assets, causing frenzied demand in 2022–2024 and pushing prices up by about 20%. Additional pressure came from russian citizens trying to withdraw capital from the risk zone created by the kremlin’s unpredictable policies.

By 2025, the new price level proved to be economically unattainable for most belarusians. In the absence of currency distortions, the market would have had to move to a painful but inevitable search for equilibrium between supply and demand. However, the situation was finally thrown off balance by the pegging of the belarusian ruble to the russian one, which artificially strengthened by 23% against the US dollar. Given the tradition of valuing real estate in foreign currency, currency exchange rate distortions automatically translated into even higher nominal prices, detached from the population’s purchasing power.

This mechanism appears unsustainable even in the short term. In 2025, russia is expected to return to “real” exchange rate formation. The federal budget of the rf is based on an exchange rate of about 100 russian rubles per US dollar. Sanctions pressure and oil price volatility create additional risks for the “wooden” currency. A devaluation of 23-25% will be a shock to the belarusian real estate market, forcing sellers to sharply revise their dollar prices.

Under such conditions, the current structure may simply not withstand the pressure. The combination of weak demand, inflated currency expectations, and external exchange rate adjustments creates all the conditions for a sharp and uncontrolled market collapse.