Tatarstan faces decline in rental housing supply

Rental rates expected to rise by 40%

The cost of rental housing in Russia is projected to increase cumulatively by more than 40% by 2030 compared with 2024, according to a forecast by analysts at the rating agency Expert RA.

“As mortgage lending conditions stabilise, from 2026 onwards a slight reduction in excess rental demand is expected; however, limited supply and the established base of solvent demand will support rental growth above the inflation rate throughout the forecast period up to 2030. Rental properties remain an attractive investment as a source of regular income in the context of diversified savings portfolios. Based on these assumptions, cumulatively, from 2024 to 2030, rental rates are expected to rise by around 42%,” the report states.

Over the past 15 years, rental prices have generally followed inflation, except during the crises of 2014–2015 and 2023–2024. In 2025–2026, rents are expected to grow faster than inflation, after which the growth will slow down, according to agency experts.

“Current trends in the rental market allow for moderately optimistic forecasts of the market rental share rising from 6.4% in 2024 to around 10% of the housing stock by the end of the decade,” the report notes.

The commercial rental market is expected to grow, increasing the amount of housing owned by professional landlords. This is driven by demand from people seeking mobility and from companies needing housing for their employees.

“The question is how much more than 40% the increase will be”

The rise in rental rates will definitely happen — and it will clearly exceed 40%. This view was expressed to Realnoe Vremya by Ruslan Sadreev, vice-president of the Guild of Realtors of Tatarstan.

As for the short-term outlook, prices may also rise in the near future. This is linked to a reduction in the Central Bank’s key rate.

“Accordingly, mortgage rates could fall to 16–17% per year. This will, of course, affect the dynamics of secondary market sales and, consequently, reduce the number of rental housing offerings,” he explained.

In essence, a more affordable mortgage rate will affect landlords — instead of renting out their properties, some owners will prefer to sell. At the same time, rental demand, according to Sadreev, will remain at its current level. Taken together, these factors will create conditions for higher rental rates — stable demand will persist despite a limited supply.

“Currently, if rental units start leaving the market, which will be linked to a possible drop in mortgage rates, the sales market will gain more momentum. Apartments that were rented out will begin to be sold. Accordingly, there will be fewer offerings, and we can expect to see an increase in rental prices,” he concluded.

“40% is an optimistic forecast”

The same view on the long-term forecast is shared by Ruslan Khabibrakhmanov, director general of the Flat company.

Overall, the rental housing market is directly influenced by the refinancing rate. The more expensive the mortgage, the more attractive renting becomes, Khabibrakhmanov agreed with his colleague.

“Rental demand increased when mortgage rates became unaffordable, and that’s when prices rose. Mortgages are beyond the reach of citizens, especially young families. In addition, there is also the down payment,” the expert noted.

For the short-term outlook, Khabibrakhmanov offered a different forecast:

“July to September are the months of highest rental demand, because students and workers arrive and look for apartments. Once the season ends, prices will drop slightly.”