Rosstat has recorded the sharpest decline in construction in Russia in the last 10 years

From January through May 2026, construction volumes in Russia declined steadily and, over the five-month period, fell by 7.4% year-over-year. This is the longest downturn in the industry since 2015–2016. Over the past decade, the sharpest decline in construction output was recorded in 2015 (3.9%), while the steepest drop in housing completions occurred in 2016 (6%).

In certain segments, particularly residential construction, the situation appears even more challenging. Since the beginning of 2026, nearly 22% fewer housing units have been built in Russia compared to the same period in 2025. 

Experts cite stricter state support rules as the main reason for this decline: as of February 1, it became prohibited to issue more than one loan per family under the “family mortgage” program, which accounts for half of all housing loans in the country. This triggered a sharp drop in demand for new construction and forced developers to postpone the launch of new projects. In addition, interest rates under this program for families with one child are expected to nearly double starting October 1.

Another factor contributing to the decline in mortgage volumes has been the Russian Central Bank’s limits on borrowers who spend more than half of their income on debt payments. Due to these restrictions, banks are rejecting up to 60% of applications for home loans, which is cooling the entire construction market.

Experts cite the high key interest rate as the main factor behind the crisis, as it makes loans too expensive for developers. As of the end of April, Russian developers had accumulated 321 billion rubles in overdue debt to banks, suppliers, employees, and the tax service. Since new buildings are constructed exclusively with borrowed funds (buyers’ money must be held in escrow accounts until construction is complete), launching new projects under such financial conditions becomes economically unviable.