Russia’s deputy prime minister Marat Khusnullin has warned that the financial safety buffer of the country’s housing developers is nearly exhausted, with 20% of firms already at risk of collapse. Speaking on 18 May 2026, he said further cuts in mortgage issuance could directly cripple the industry, which relies heavily on state-subsidised family mortgages and funds from equity investors. The warning follows a sharp slowdown in housing construction that began in 2024 after the central bank started tightening credit conditions.
Developers’ financial buffer nearly exhausted
Khusnullin stated that any additional restrictions by the central bank or the government would trigger mass bankruptcies, leaving thousands of homebuyers who paid into construction projects without completed flats. He noted that the industry’s dependence on cheap mortgages had artificially inflated demand, and as lending conditions tightened, the market overheated. According to the official remarks, the state now needs to allocate 4–5 trillion roubles annually in mortgage subsidies just to keep the sector afloat.
Sharp decline in housing completions
Official data from Rosstat shows that housing completions in Russia grew by only 0.3% in 2025, and in the first quarter of 2026 fell by 28.2% year-on-year to 23 million square metres. Khusnullin described the drop as a negative consequence of the mortgage cooling that began in 2024. He said the situation is particularly serious because between 15% and 21% of regional budget revenues come from construction-related taxes, meaning the downturn directly affects public finances and social infrastructure spending.
End of penalty moratorium adds pressure
The expiry of a moratorium on fines for delays in handing over flats to buyers has added further financial strain on developers. From the start of 2026, homebuyers can again sue for penalties, which Khusnullin warned will lead to a surge in court claims against companies already struggling with cash flow. Many developers are expected to initiate bankruptcy procedures and exit the market, leaving hundreds of unfinished housing estates behind them.
Regional budgets and related industries at risk
The construction slowdown is already rippling through related sectors such as cement, brick, metal structures and logistics. Khusnullin said declining activity reduces tax revenues, worsens labour market conditions and forces regional governments to freeze social and infrastructure projects. He warned that this would lower the quality of life for residents and slow overall GDP growth, while real household incomes continue to fall amid high inflation.
Central bank’s contrasting assessment
The Bank of Russia has given a more reassuring view, describing the overall loan portfolio quality in the construction sector as good and arguing that problems at individual developers are not systemic. However, at the end of April the regulator promised to tighten rules on reserving capital for loans used to build multi-apartment blocks, indicating growing concern. The divergence between the government’s alarm and the central bank’s caution highlights a deepening debate over how to manage the housing market’s downturn without triggering a wave of defaults.
