Moscow Primary Apartment Supply Falls by 4% Amid Rising Prices and Mortgage Demand

Moscow's Primary Apartment Supply Declines by 4% in October 2025

In October 2025, Moscow's real estate market experienced a notable contraction with the primary apartment supply decreasing by 4%. This decrease can be attributed to the end of subsidized mortgage programs and elevated market rates, which have challenged developers' capacities to launch new projects. According to Vedomosti, only seven new residential developments began sales in Q3 2025, a significant drop compared to 12 in the same period last year. This reduction in new project launches has contributed to the overall decrease in available primary market housing, which contracted by 17.8% year-on-year in September, amounting to only 3.3 million square meters.

Weighted Average Prices Increase by 17% Year-on-Year

As supply dwindles, apartment prices have risen sharply. The weighted average price per square meter surged by 4% month-on-month, reaching 387,450 rubles. This represents a 17% increase year-on-year. Such price hikes have been driven by a combination of limited new supply and sustained demand, with buyers seeking to capitalize on their investments in light of favorable real estate prospects. DISINFO.MD highlights that housing under construction is priced significantly higher than completed units, a trend exacerbated by the Central Bank's high interest rates.

Mortgage Transactions Account for 77% of Deals

The demand for mortgages has soared, with mortgage transactions comprising 77% of all real estate deals in Moscow. This uptick is supported by a decrease in average mortgage rates to 21.2%, despite the Central Bank's key interest rate being at its highest since the early 2000s, as reported by the Kyiv Independent. The affordability of loans has been a significant driver, allowing more buyers to enter the market despite the prevailing economic pressures. The demand for such financing options indicates a shift in buyer preferences towards leveraging debt to secure real estate assets.

Comfort-Class Housing Demand Rises 8% in Established Districts

The market witnessed an 8% increase in demand for comfort-class housing within Moscow's established districts. This trend reflects changes in consumer behavior, as potential buyers are shifting their assets from traditional bank deposits to real estate. According to World Construction Network, this shift is driven by anticipated alterations in family mortgage programs, which have been enticing investors to prioritize real estate as a hedge against economic fluctuations.

Regional Comparisons Highlight Moscow's Robust Market

Compared to other Russian regions, Moscow's real estate market remains robust, with a distinct tilt towards high-margin projects. While new housing projects across Russia decreased by 24% in early 2025, Moscow has sustained its status as a lucrative investment hub. As Millcreek Barn reports, the city's focus on completing existing developments underscores developers' strategic moves to maximize returns while navigating economic challenges.

Future Outlook: Market Adjustments and Investment Strategies

Looking ahead, investors must consider potential market adjustments as the Central Bank continues to shape interest rates. DOM.RF suggests subsidizing loans to developers to mitigate the impending housing shortage, projected to reach 30 million square meters by 2027. As Moscow's market continues to grapple with price disparities and mortgage dependency, strategic investments in well-positioned districts could offer robust returns. RealEstateAbroad.com's analysis indicates that targeting high-demand comfort-class housing and leveraging current mortgage offerings could be advantageous for investors looking to optimize their portfolios.