Expert commentary on the current state of the housing market reveals mixed signals, balancing concerns about potential bankruptcies and the protective measures available to buyers. Alexander Perevoznikov, the head of Tymy.Realty, discussed these issues amid reports indicating deep trouble for new housing developments in Russia as of early 2025.
With increasing alarm surrounding new housing market conditions, statements have emerged about declining demand for new homes and the rising unavailability of mortgages following the conclusion of preferential lending programs. Perevoznikov, addressing these concerns, stated, "The situation on the market today is really complicated. Sales have significantly decreased due to rising mortgage rates and the end of preferential programs," explaining the dramatic impact on most developers.
The backdrop of these current challenges echoes through the memories of past economic crises. He pointed to the widespread bankruptcies of developers during the turmoil of 2008 and 2014, stating, "All of this certainly raises alarming thoughts... People recall the bankruptcies of developers during the crises of 2008 and 2014, not to mention the 90s, when many cities were 'adorned' with unfinished buildings." This historical perspective adds weight to current fears as buyers brace for what might come next.
Yet, amid such challenges, the housing market's foundational structure offers reassurances. New protective measures have established escrow accounts, which have become central to securing buyers' investments. Perevoznikov noted, "The only real risk for the buyer in the event of problems with the developer is the loss of time." Escrow accounts serve as safeguards where payments are held and only released upon project completion, providing security for buyers wary of potential setbacks.
March 1 marks another pivotal date as the escrow mechanism begins to extend beyond traditional housing projects to individual housing construction (ИЖС). "Since March 1, the funding mechanism through escrow accounts will also work on the market of individual housing construction," Perevoznikov announced, indicating the growing safeguards for buyers concerned about the sustainability and reliability of development projects.
While the real estate market faces pressures, Perevoznikov suggests it remains relatively stable over the long term. He cautioned prospective buyers about potential pitfalls but encouraged them to recognize the structures protecting their investments. He stated, "Overall, buyers planning to purchase land for individual housing construction should find encouragement in the news about escrow accounts." This new framework may inspire confidence, even as reports suggest the market for suburban housing might face contraction due to rising costs and stringent requirements for developers.
The expert elaborated on the expectation for project costs to increase significantly, which could encourage buyers to favor city apartments over more expansive homes on the outskirts. He mentioned, "The new rules will lead to substantive increases to average budgets, and if ИЖС projects hit the 10 million rubles mark, buyers may choose more predictable apartments instead." This could tilt the market toward established developments instead of new construction, which presents uncertain timelines.
Perevoznikov reiterated his thoughts on how the decreased launches of new projects should not compound existing market deficiencies. "There will not be shortages or price declines as upcoming project launches slow down," he added. His assessments bring clarity to the market dynamics affecting possible housing investments, allowing potential homeowners to make informed decisions. His reassurance emphasizes, "So everyone who is planning on buying property has no reason to wait for conditions to stabilize; the market is already stable, and buyers are well protected legally.”
With these insights from Perevoznikov, the housing market outlook must balance patient strategic planning with vigilant risk assessment. For buyers, leveraging the protections offered through escrow accounts and researching developer credibility might lead to more informed and secure purchases, even amid current uncertainties. The discussion reflects shifting priorities within Russia's real estate sector as stakeholders navigate the complex interplay of market pressures, economic policies, and regulatory measures.
Future buyers are now faced with difficult choices, yet with the necessary due diligence and awareness of their protective options, they can proceed with confidence as they venture forth onto the housing market.