Moscow New Housing Prices Surge 29% in 2025

The Moscow real estate market witnessed a dramatic price surge in 2025, with primary housing costs in the city's 'Old Moscow' area rising by a record-breaking 29% over the year. This increase represents the highest growth rate recorded in the past five years.

Despite a cooling in consumer demand, prices reached 800,000 rubles per square meter. The market dynamics shifted significantly as developers adjusted their strategies, leading to a structural change in available inventory.

The cost of new housing in Moscow's central districts experienced unprecedented growth throughout 2025. The average price per square meter climbed to 800,000 rubles, driven by a sustained upward trend that accelerated as the year progressed.

The pace of growth itself increased by 12 percentage points compared to the previous year. This acceleration occurred in a market environment where traditional indicators, such as consumer demand, were actually declining.

Key metrics for the year included:

• Overall price increase: 29% (highest in 5 years)
• Final average price: 800,000 rubles per square meter
• Acceleration rate: +12 percentage points year-over-year
• Market condition: Falling demand despite rising prices

The primary driver behind this price surge is a fundamental change in the market's supply structure. Developers have systematically removed budget-friendly options from the market, shifting their focus toward higher-margin projects.

Construction companies are deliberately slowing the launch of new projects while prioritizing the development of properties classified as business-class or higher. This strategic pivot means that entry-level housing options are becoming increasingly scarce in the 'Old Moscow' area.

Market observers note that this is not a temporary fluctuation but a structural adjustment. The disappearance of affordable housing segments creates a self-reinforcing cycle where remaining inventory becomes more exclusive and expensive.

The relationship between supply changes and price movements reveals a complex market evolution. Typically, falling demand would lead to price stabilization or reduction, but the current scenario demonstrates how supply constraints can override traditional market forces.

Developers' decision to limit new project launches serves multiple strategic purposes:

• Managing inventory levels to maintain price stability
• Aligning product offerings with higher-income buyer segments
• Reducing construction risks in a volatile economic environment
• Maximizing profit margins per unit sold

This approach has effectively created a two-tier market where premium properties continue to appreciate while affordable housing options vanish from the primary market entirely.

The 'Old Moscow' area represents the historical and administrative core of the Russian capital, where land availability is severely limited. This geographical constraint amplifies the impact of supply-side decisions, as new construction opportunities are inherently restricted.

The 29% price increase in this specific zone contrasts with broader market trends, highlighting the premium nature of central Moscow real estate. The area's unique characteristics include:

• Limited land availability for new construction
• High historical and cultural value
• Concentrated administrative and business infrastructure
• Established premium buyer demographics

These factors combine to create a market environment where price elasticity is low, and supply changes have immediate and pronounced effects on pricing.

The current market trajectory suggests continued price pressure in the primary housing segment of Moscow's central districts. The structural shift toward business-class and premium properties appears to be a sustained strategy rather than a temporary adjustment.

Market participants should anticipate several key developments in the coming year. The scarcity of budget options is likely to persist as developers maintain their focus on higher-margin projects. This will continue to push average prices upward, potentially widening the gap between central Moscow and peripheral districts.

For potential buyers, the market presents a challenging environment where traditional entry points into homeownership are disappearing. The 29% surge in 2025 serves as a clear indicator of the market's direction, emphasizing the importance of understanding these structural changes when planning real estate investments in the Russian capital.