Why the housing shortage is growing in russia
Housing shortage in russia is worsening. This has been acknowledged by the russian ministry of construction. Due to the declining purchasing power of russians, developers have reduced the number of new housing projects. The construction of new housing has dropped by an average of 24% across russia, with the crisis hitting the moscow region and surrounding areas the hardest — over 50% of construction projects there have been halted.
The reasons include a high key interest rate, inaccessible mortgages, and the rising cost of construction materials due to sanctions. Even if the key rate decreases by the end of this year, over the next two years developers will mostly be completing already started projects.
The war of aggression against Ukraine is draining russia’s resources. Housing prices are rising while people’s ability to afford homes is falling. The longer the population supports the war, the higher the price they will have to pay for it.
