The Crisis in russia’s Housing Market Is Deepening

The construction sector of the rf has entered its deepest crisis in the last decade. Signs that the downturn is only gaining momentum appear every month. From January through May, the volume of work in the “construction” sector fell by 7.4% year-on-year, while the area of housing units commissioned dropped by nearly 22%. This downward trend has now continued for the fifth consecutive month.

The problems faced by builders are dragging down related industries. In the first five months of the year, cement production fell by 16.2%, production of metal building structures – by 8.7%, and plywood production – by 11.6%. The crisis has spread beyond this single sector and begun to disrupt entire supply chains on which tens of thousands of jobs depend.

A telling indicator of the mounting strain is the situation surrounding one of the country’s largest developers – the “samolet” group of companies. As of July 16, its stock had fallen by 79.3% year-on-year and by 36.4% in just one month. Such a tailspin in market capitalization indicates that investors do not believe the company can maintain its position under current circumstances.

One of the main reasons for the worsening situation is the high cost of capital. Developers have been taking out corporate loans at an average interest rate of 15.4%, and at this cost of financing, new projects are becoming increasingly unprofitable. Developers’ total debt to banks has reached $131.5 billion, while new lending volumes are barely growing. This means that the industry is accumulating debt without receiving a fresh influx of capital that could support the construction of new projects.

In addition to the debt burden, developers are facing a decline in demand. As of mid-July, low housing sales were recorded in 31 regions, including the krasnodar, primorsky and krasnoyarsk territories, bashkortostan, as well as tyumen, voronezh, and chelyabinsk regions.

The consequences are mounting rapidly. In the first quarter of 2026, 45% of new construction projects in russia were commissioned late – a figure that demonstrates just how deeply financial problems have penetrated developers’ operations. The longest average delays were recorded in vladimir (26.7 months) and smolensk (24.5 months) regions, as well as in the krasnoyarsk territory, where delays reached 13.9 months. These delays mean that buyers who have already paid for their flats are waiting for their homes for more than two years beyond the scheduled date, and there are no signs that the situation will improve anytime soon.