A quarter of Russian developers are on the verge of bankruptcy, but a housing market collapse is not expected

In his recent interview, Russian Deputy Prime Minister Marat Khusnullin said that 19% of developers are at risk of bankruptcy. At the same time, according to real estate market statistics, the cost of apartments in new buildings has increased by 0.8% since the end of spring. This is a small increase, but what is surprising is that, contrary to previous forecasts, the price per square meter is not falling, even for problematic developers. MK asked Alexander Razuvaev, a member of the Supervisory Board of the Guild of Financial Analysts and Risk Managers, to explain these contradictory trends.

— According to Marat Khusnullin, bankruptcy risks exist for approximately every fifth developer, since 19% of projects had their commissioning dates postponed. The Deputy Prime Minister emphasized that this does not mean that these companies will necessarily go bankrupt. Do you agree with this vision of the situation?

— I believe that there are more problems in the construction market. In reality, a quarter, or 25% of developers are at risk of bankruptcy, as they are heavily indebted, but there really will be no crisis. The gradual reduction of the key rate of the Central Bank of the Russian Federation, and the regulator's policy has already begun to soften, will have a positive effect on their financial indicators. However, the amount of debt they service will not decrease as quickly. The developers themselves now need to learn to live in conditions of "expensive money", primarily borrowed money.

However, the authorities will not allow any tragic consequences in the real estate market. In extreme cases, developers will be allowed to change their approaches to sales. For example, in order for people to start actively buying apartments, installments, discounts, or offers on very special mortgage terms may be allowed during the year. This will support buyers' interest. In extreme cases, the authorities will be able to support specific developers through state banks. After all, it is important to understand that if the construction industry in Russia comes to a standstill, this will deal a blow to other very sensitive sectors of the economy. For example, metallurgy will be in trouble. Large companies in this sector will have serious problems, and this will already mean a reduction in taxes and, as a result, budget revenues.

— Why then, under current conditions, aren't prices per square meter decreasing? After all, according to the laws of the market, when demand decreases, the cost should fall.

— There are several explanations for this. Indeed, interest in buying housing among Russians has fallen. According to the report of the state mortgage agency, from July 2024 to June 2025, 458,727 apartments in new buildings with a total area of 21.9 million square meters were sold in Russia, which is 38.7% lower in lots and 37.2% less in meters than a year earlier. However, prices per square meter are not going to fall. According to specialized analytical centers, its average cost on the primary market in cities with a population of over one million has increased by 10.3–13.8% over the year. The most noticeable increase was in Moscow, Chelyabinsk and Omsk.

This is happening, firstly, because many developers have accumulated a decent “safety cushion” during the previous period of the preferential mortgage program and can calmly expect a reduction in the key rate, after which market mortgages will again become more accessible and demand for them among Russians will increase.

Secondly, inflation and sanctions, as well as the consequences of a long period of high key interest rates, have led to an increase in the cost per square meter during the construction of facilities, and developers do not want to sell something at a loss.

Thirdly, this is, of course, a gradual decrease in the volume of housing commissioning, due to which the cost of available square meters can be increased little by little. That is, the price of a square meter does not fall, because the total volume of these meters in stock is decreasing. Let me remind you that, according to Rosstat, the volume of housing commissioning in January-July of this year fell by 4% year-on-year, and in July alone - by 13.8% compared to the same month in 2024.

Well, and fourthly, however, this is also an important factor that should be taken into account - the thirst for profit. Developers have become accustomed to the good life in previous years and are looking for ways to maintain their income.

— How will the reduction of the key rate affect the real estate market?

— Developers will have fewer problems with debt servicing, since mortgages will revive and demand for apartments will grow. But for citizens, this will mean that prices will follow suit, and they will rise much more noticeably than now. However, I believe this will not happen before the summer of next year.

— When will housing become more affordable for Russians?

— In the mass understanding of this word, in the sense that they invested in it in Soviet times, I think never. The economic model has changed in Russia and now in order to buy something serious and expensive, people have to save up for it in savings accounts, but this does not apply to mortgages. There are professions, and they are necessary and socially important — in the medical field, in teaching and many others, where even putting your entire salary into a savings account, you still won’t be able to buy an apartment in 30 years. The problem needs to be solved in some other way. I can only note that not only Russia, but also many other countries have faced similar difficulties. There, people often rent housing their entire lives. Ours is not the worst option: in Russia, the majority of Russians are still the owners of their apartments.

— There is also a strong stratification: there are Russians who find it difficult to buy even one apartment in their lifetime, and there are those who actively buy real estate for investment purposes.

— At the moment, I would not consider real estate a good investment idea. In the short term, deposit rates are still very high. And keeping savings in deposits guarantees their protection from inflation and a good income to boot. The market as a whole is declining, but the conditions on it are still good for Russians. Deposit rates as of mid-August remain at 14-16% per annum, returning to the figures of May-June 2024. However, this is still noticeably, in fact, more than one and a half times higher than inflation, which, according to Rosstat, was 8.8% in July.