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Russian New Apartment Sales Plunge 26% Amidst High Interest Rates
Sales of new apartments in Russia plunged 26% in the first half of 2025 compared to the same period in 2024, totaling 10.4 million square meters, due to the end of a subsidized mortgage program and high-interest rates; Moscow and surrounding areas showed less decline.
- How did the decline in new apartment sales vary across different housing classes and financing methods?
- The decline in new apartment sales is uneven across housing classes. Typical and comfort-class sales fell by 28%, while business and elite class sales decreased by 14%. The share of mortgage-financed sales dropped to 60%, while cash and installment plan sales increased to 40%.
- What is the primary cause for the significant drop in new apartment sales in Russia during the first half of 2025?
- Sales of new apartments in Russia have decreased by 26% in the first half of 2025 compared to the same period in 2024, reaching 10.4 million square meters. This drop is attributed to the end of a subsidized mortgage program that fueled demand in 2020 and 2021. The current high market interest rates (21%) also hinder sales.
- What are the projected long-term impacts of high interest rates and current pricing strategies on the Russian new apartment market?
- High prices, exceeding those of existing homes in the same locations, further discourage purchases. While prices are currently stable, experts predict market recovery depends on lowering interest rates to around 15-16%, which is not expected for at least a year. Until then, individual payment plans may be offered by developers.
Cognitive Concepts
Framing Bias
The headline is not provided, but the framing emphasizes the negative aspect of the sales decline, leading with the percentage drop. While the article presents some positive data points (such as slower price increases compared to inflation), these are presented after the negative figures. This creates a negative overall impression of the market. The inclusion of specific regional data points might be intended to balance the negative tone, but the strong opening about overall market decline creates an initial and lasting negative sentiment.
Language Bias
The language used is generally neutral, using factual data and direct quotes. However, terms like "za-graditel'nyye stavki" (prohibitive rates) carry a strong negative connotation, even if factually accurate. This could be slightly softened by clarifying the high-interest rate is a result of Central Bank policy. The use of terms such as "перегрев спроса" (overheating of demand) could be considered subjective. A more neutral descriptor might be preferable.
Bias by Omission
The article focuses primarily on the decrease in sales and the perspectives of realtors and analysts. However, it omits perspectives from homebuyers themselves, which could provide valuable insight into their motivations and challenges in the current market. The impact of government policies beyond the subsidized mortgage program is also not explored. While acknowledging space constraints, including these perspectives would offer a more balanced view.
False Dichotomy
The article presents a somewhat simplified view of the market by focusing heavily on the impact of interest rates and the end of the subsidized mortgage program. It doesn't fully explore other factors contributing to the decline in sales, such as broader economic conditions, changes in consumer preferences, or the availability of alternative investment opportunities. The implication is that interest rates are the sole driver, which is an oversimplification.
Gender Bias
The article features two male experts, Grigory Poltorak and Konstantin Aprelev. While their expertise is relevant, the lack of female voices in the analysis might unintentionally reinforce gender imbalances within the real estate reporting field. The article could benefit from including diverse perspectives.
Sustainable Development Goals
The decrease in new housing sales, particularly due to high mortgage interest rates, disproportionately affects lower-income populations who rely on affordable housing options. High prices and reduced access to credit exacerbate existing inequalities in housing affordability.