The Contribution of Supply and Demand Factors to the Dynamics of Primary Housing Prices in Russia

In recent years, housing prices in Russia in buildings under construction have grown rapidly and outpaced the dynamics of consumer inflation, household incomes, rental costs and construction costs. As a result, since the beginning of 2020, average prices for primary housing have doubled. The dynamics of residential property prices is influenced by many factors. The article adapts the approach proposed in the recent work of A. Shapiro (2022) and assesses the extent to which supply and demand factors explain the growth of housing prices in Russian regions. The article presents the first decomposition in scientific literature of the dynamics of housing prices in Russia in 2016–2024 into factors of demand and supply at a regional level. The calculations and analysis carried out by the authors allow us to take a fresh look at the growth of housing prices in different regions of Russia, evaluate the effectiveness of measures to support the housing market and understand what to expect from price dynamics in the future.