About 20% of developers in Russia are on the verge of bankruptcy due to falling sales and high interest rates, and their share could soon exceed 30%. The most vulnerable are companies in the mass housing segment that depend on mortgage demand. Over 19% of developers are officially postponing project completions, and delays of more than six months classify them as “problematic.”
The sector suffers from low demand, limited state support, and the diversion of resources to the war against Ukraine. As a result, sales are declining, debt burdens are rising, and construction is being frozen. Investments in real estate fell by 44% in the first half of 2025. Banks are strictly screening clients: in June, 50.6% of mortgage applications were rejected. Even borrowers with flawless credit histories find apartments almost unattainable—the effective cost of a mortgage, including insurance and fees, reaches at least 25% per year.
This interest rate pressure affects not only households but also businesses. In the corporate sector, the share of problematic loans rose to 10.4% in Q2, or $111.9 billion, an increase of $8.6 billion over three months. The real deterioration was most pronounced in the real estate sector.
The Russian authorities have already begun considering measures such as a moratorium on developer bankruptcies, external restructuring, and the creation of temporary state funds to complete troubled projects.
