Russian developers on the brink of collapse: 1 in 5 companies already in the critical zone as the government directs all the support to the war against Ukraine, Ukraine’s Foreign Intelligence Service has reported. 

Around 20% of developers in Russia are facing bankruptcy due to falling sales and high mortgage rates.

The most vulnerable are mass housing companies, which rely heavily on mortgage demand. Over 19% of developers are officially delaying project completions, and delays exceeding six months push them into the “problematic” category.

Impact of the economy and the war

The sector suffers from low demand, limited government support, and resource diversion to the war in Ukraine. This results in declining sales, rising debt burdens, and construction freezes.

Investments in real estate in the first half of 2025 fell by 44%. Banks reject half of mortgage applications, while effective interest rates reach at least 25% per year, even for reliable borrowers.

Corporate sector and potential solutions

In the corporate segment, the share of troubled loans rose to 10.4% ($111.9 billion), with $8.6 billion added in three months. The real estate sector saw the greatest deterioration. Russian authorities are already considering moratoriums on developer bankruptcies, external restructuring, and the creation of temporary state funds to complete problematic projects.