The Crisis in russia’s Construction Industry Is Deepening: Debt, Falling Profits, and Lack of Demand

Problems in russia’s construction industry are intensifying. They are accompanied by widespread business closures, rising bankruptcy risks, and a decline in residential construction. Financial pressure on developers is mounting, and there are no prospects for the industry’s recovery.

From January through September 2026, 31,100 construction companies were liquidated in russia. This represents about 10% of their total number. Companies building residential and non-residential structures were hit hardest: their numbers fell by 4.8% over the year. Another 30,400 companies were undergoing bankruptcy or liquidation proceedings; operations on the accounts of 41,700 were suspended; and 47,100 are at high risk of bankruptcy.

The industry’s key problem is the deterioration of its financial situation. The debt of the 12 largest developers rose by 19% over the year – to $42.5 billion. Debt servicing costs increased by 30% – to $3.1 billion, while the combined net profit of these companies plummeted from $1.18 billion to $120.5 million.

The decline in demand for housing is dealing an additional blow. Over the past year, the profitability of residential construction in russia has fallen from 20–25% to 8–12%. In September 2026, in moscow alone, the number of transactions involving new-construction homes fell by 32% year-on-year, while developers’ revenue dropped by 14%. At the same time, the area of unsold housing reached 34.7 million square meters.

The crisis is also affecting the scale of construction. From January through September 2026, housing completions fell by 13.4% to 66.3 million square meters. The sharpest decline was recorded in the single-family housing segment – a 20.8% drop to 41.4 million square meters.

A further deterioration of the situation creates new risks for russia’s economy. Declining profits, rising debt, and business closures mean job losses, reduced tax revenues, and weaker demand for products from related industries – ranging from the production of building materials to metallurgy and transportation services.