Russian economy: why real estate prices have doubled in Moscow in five years

In 2020, during the coronavirus pandemic, confinements and other restrictive measures led to a considerable drop in the demand for real estate. In order to stimulate sales, the Russian government had launched a new program called “preferential mortgage loans” (Preferential mortgage). This had had a significant success, several hundred thousand families who have benefited from the reduced interest rates subsidized by the State .

The rise in demand, however, favored the increase in prices for new housing, while the high interest rates of the Central Bank dissuade the promoters from funding the construction of new housing.

• In October 2024, in order to contain inflation, the Russian central bank brought its guiding rates to 21 %, their highest level since the early 2000s.
• Promoters are the first affected by the recent increase in rates. During the first quarter of 2025, new housing projects totaling only 8.1 million square meters were launched in Russia, a drop of 24 % compared to last year.
• The increase in rates, the cost of the workforce, building materials and the increase in income taxes fueled by the Putin War in Ukraine repercussions on the price of M², which was on average at € 1,840 in March-against € 1,270 in February 2022.

It is in Moscow, which concentrates almost a tenth of the country’s population, that the price increase has been the most significant since 2020. It is now necessary to pay 12.9 million rubles on average for the purchase of a new apartment in the Russian capital (+ 86 % in five years), and 9.6 million rubles for a studio (+ 97 %). The rental was also impacted by the overall price increase: the cost of rent now represents 74 % of the average Moscow wages, against 63 % two years ago .

• The rise in prices limits the installation in Moscow of modest income families. For a budget of 5 million rubles (around 53,000 €), which allowed before 2020 to buy an apartment of 30 to 40 m² in neighborhoods close to the center, it existed last March only 7 lots available on the scale of the city – against 1124 in 2024 .
• In parallel, the municipal authorities encourage the development of high -end real estate. In the 1st quarter of 2025, an Intermark City Real Estate study reveals that Moscow has increased in three years from 18th to 5th place in the world in the classification of cities where the price of real estate for high -end housing is the highest.
• The average purchase cost per square meter in these luxury buildings is now at € 21,600 in Moscow, more than in Shanghai (€ 19,700), London (€ 18,900) or Paris (€ 18,600).

The rise in real estate prices has led to a considerable increase in the average duration of mortgage loans in Russia: in order to maintain monthly payments at an affordable level, it takes an average of 26 years today to reimburse the purchase of new housing . As a result, more than half of mortgage loans are now reimbursed by retired people.