Russian housing price gap estimated at 9–18 percent

The Bank of Russia has developed an econometric model to estimate the price gap between new and existing housing markets, considering factors such as construction date, property class, and apartment area.

By early 2026, the regulator's calculations showed a 9 percent gap, rising to 18 percent when renovation costs for resold new builds are included.

This contrasts with Rosstat data, which reported a 52 percent gap by the end of 2026 Q1 for Russia as a whole.

Rosstat's higher figure is attributed to new housing's objectively better quality and the inclusion of older homes in existing market averages.

Additionally, regions with more expensive housing, like Moscow and St. Petersburg, have a higher share in the new apartment market, inflating Rosstat's aggregate price gap.

The Bank of Russia stresses that accurate estimates require comparing homes with similar characteristics and using model-based approaches.

The Bank of Russia's analysis confirmed the justification for its higher capital requirements for banks issuing mortgages with a down payment below 20 percent.

These direct restrictions on risky loans are designed to cover the risks of a decline in the value of housing under construction, especially if it is later sold in the existing housing market.

This policy ensures financial institutions are adequately protected against market fluctuations.

To provide further protection against other identified risks, the regulator and banks may set higher down payment requirements, if needed.

This proactive approach aims to maintain financial stability and mitigate vulnerabilities in the mortgage lending segment.