Novosibirsk’s real estate market is facing a crisis due to a record number of unsold apartments and high interest rates, potentially leading to bankruptcies among developers. Experts warn that the current situation mirrors previous market downturns, but with new challenges related to project financing and escrow accounts. The surge in unsold apartments is attributed to the end of mass preferential mortgage programs, which had fueled a construction boom in recent years.
The number of unsold apartments in completed buildings has surpassed the 2016 record, reaching 17,700 as of May 2025. Sales have plummeted, with September 2024 seeing only 1,415 apartments sold compared to 3,824 in the same period of 2023. Similarly, October sales dropped from 2,900 in 2022 to 1,100 in 2023. This oversupply is putting immense pressure on developers, who are struggling to attract buyers amid high interest rates and tightened lending conditions.
Developers are finding it difficult to lower prices due to their reliance on bank financing and escrow accounts. Unlike previous crises where price reductions were possible, the current system ties developers to banks, with unsold apartments serving as collateral. High interest rates on project financing, especially after completion, further exacerbate the financial strain. This has led to developers resorting to tactics such as offering installments and delaying project completion to avoid increased loan burdens.
The crisis is impacting related industries, with contractors and building material manufacturers suffering from reduced demand and oversupply. Companies are suspending projects, leading to salary cuts and staff reductions. Experts note that banks have tightened their lending criteria for land purchases and project financing, further restricting developers’ ability to launch new projects. Some developers are freezing new projects altogether, hoping for a decrease in the key rate and a relaxation of sanctions.
Analysts suggest that the market may not recover until the second half of 2027, depending on future government support programs and interest rate adjustments. While the government is trying to boost the market, the secondary market is struggling due to lack of preferential programs. Some experts predict bankruptcies among developers, particularly those who overextended themselves before the end of preferential mortgage programs. The situation is described as a deep correction following an abnormal recovery period, with the region potentially seeing a slowdown in housing commissioning.