Situation on Moscow’s luxury new-build real estate market: falling demand and rising prices

At the beginning of 2026, Moscow’s luxury new-build real estate market finds itself in a situation that at first glance appears contradictory: demand (measured by the number of signed equity participation agreements in the premium and de luxe segments) is declining, while prices continue to rise. Behind this paradox lies a systemic logic that must be understood by buyers, sellers, and investors alike. We examine the nature of this phenomenon, analyze the figures, and explain which strategies should be applied in such a market.

The figures behind the paradox

According to Ashtons International Realty, sales volume in Moscow’s luxury new-build residential market decreased by 10–12% in Q1 2026 compared to the same period in 2025. In the premium segment (from 40 million rubles per unit), the decline was around 11%, while in the de luxe segment (from 100 million rubles), it was around 8%. This is the first quarterly decline in six quarters, marking a clear departure from the strong growth in transactions observed in 2024 and 2025.

At the same time, the weighted average price per square meter in the primary luxury market increased by 5–8% over the quarter, while in the de luxe segment the growth reached 8–12%. This is counterintuitive: classical economic logic suggests that prices should adjust downward when demand falls. However, the current market shows the opposite dynamic. The reasons are explained below.

First reason: structural shortage of quality supply

The key to understanding the paradox lies in the shortage of high-quality supply. While the total number of luxury units on the primary market has increased (around 2,100 apartments are currently on sale), most of this volume relates to early-stage projects or does not meet the expectations of demanding buyers. Units that can be considered “ready to buy” — in prime locations, with strong concepts, reputable developers, and well-designed layouts — are significantly fewer.

Our estimates suggest that the truly “liquid” supply of high-quality primary units in Moscow amounts to only 350–450 apartments. This means that despite the apparent abundance of listings, the real choice for an active buyer is limited. This shortage supports high pricing for the best units, despite a general slowdown in demand.

Second reason: exit of mass buyers and shift in buyer structure

In 2024–2025, a significant share of transactions in the luxury primary market came from buyers who were not traditionally part of this segment. These were clients with budgets at the lower end of the luxury range (30–60 million rubles), purchasing mainly for investment purposes or as a step into their first luxury property. In 2026, this audience has shrunk — partly due to high interest rates on bank deposits, and partly due to the overall financial pressure on the high-income middle class.

At the same time, the share of ultra-high-net-worth buyers (over 150 million rubles per property) has increased. These buyers are less sensitive to economic fluctuations; their decisions are driven by long-term capital allocation strategies rather than short-term yield. Their demand is concentrated precisely on high-quality units, which are in short supply — thereby supporting prices at the top end.

As a result, total transaction volumes decline due to reduced activity in the lower segment, while the average deal size increases due to a higher share of expensive transactions. Prices per square meter rise as demand concentrates on a limited pool of top-tier assets.

Third reason: shift in demand toward completed property

As noted in previous reports, in 2025–2026 a significant portion of luxury demand has shifted from the primary to the secondary market. The reasons include the high opportunity cost of capital in a high-interest environment (funds frozen in escrow accounts for 2–3 years), reluctance to take development risk, and demand for immediate occupancy after purchase.

This migration of buyers explains a substantial part of the decline in new-build sales. Our estimates suggest that around 40% of buyers who would previously have purchased in the primary market in 2026 opted for secondary properties instead. This reduced demand for new builds without putting downward pressure on prices, as developers are maintaining pricing levels, expecting demand to return and avoiding setting negative pricing precedents.

Fourth reason: pricing inertia among developers

In 2026, luxury developers are demonstrating unusual pricing rigidity. Traditionally, developers would respond to weakening demand with discounts or aggressive promotions. This is no longer happening.

There are several reasons:

-high construction costs (materials and labor up 30–40% since 2022), limiting room for price cuts without margin loss;

-the need to maintain price trajectory across project phases, as early discounts would undermine pricing expectations for future stages and secondary sales;

-escrow-based financing, which reduces immediate cash-flow pressure and allows developers to withstand slower sales.

Instead of price reductions, developers now offer alternative tools: extended installment plans (up to 24 months), trade-in programs, bundled offers (parking spaces, storage units), and customization options. This allows them to maintain headline prices while still attracting buyers.

What this means for buyers

For active buyers in 2026, several conclusions can be drawn. First, waiting for a “price crash” is unrealistic. Market structure — shortage of quality supply, developer pricing discipline, and demand concentrated at the top — does not support a sharp correction scenario.

Second, careful project selection is crucial. High-quality supply is limited, and buying into a suboptimal project may lead to slow resale performance in the secondary market after completion.

Third, negotiation is possible but indirect. Developers are unlikely to reduce list prices, but may offer 3–7% effective discounts through individual terms, included parking spaces, installment plans, or layout customization. Working with a professional broker with developer relationships significantly improves access to such benefits.

Fourth, 2026 is a good year for selection. While supply quality is uneven, the quantity of options allows buyers to compare multiple projects and make informed decisions. With reduced demand pressure, developers are more responsive to individual client requests.

What this means for investors

For investors, the 2026 market presents interesting opportunities but requires more rigorous selection. The key factor is choosing the right project. In a declining transaction environment, only the strongest developments show consistent price growth during construction.

Investors in average projects may face slow resale after completion, potentially at a discount. Investors in top-tier projects can achieve capital appreciation of 35–45% over the development cycle.

Key selection criteria include: strong developer reputation, prime location, distinctive architectural concept by a recognized bureau, limited number of units (under 100), strong service infrastructure, and high-quality engineering solutions.

The investment horizon in 2026 is 3–5 years. Short-term strategies (selling immediately after completion) are riskier under current conditions. Long-term holding (5+ years for rental income or later sale) offers significantly more stability.

What this means for developers

Luxury developers in 2026 face the challenge of maintaining sales momentum under constrained demand. Those who preserve pricing while actively using demand-stimulation tools (installments, customization, partnerships with brokers) maintain stable sales levels. Others face a 20–30% decline in transactions and are forced to rethink their sales strategies.

Collaboration with professional brokers is becoming critical. As buyers become more cautious, trusted recommendations from brokers play a key role in decision-making. Ashtons International Realty works closely with most major Moscow developers and serves as an important sales channel for luxury projects.

Crisis or normalization?

A key question is whether the current situation represents a market crisis or a normalization phase. Our view: this is a normalization, not a crisis.

The market experienced aggressive growth between 2022 and 2024, driven by multiple simultaneous demand catalysts. The current slowdown reflects a return to a more sustainable equilibrium, where demand aligns with long-term fundamentals rather than short-term spikes.

We expect stabilization in 2026, with potential renewed growth in 2027 as the cost of capital decreases and buyers return from the secondary market. Prices for high-quality projects are expected to grow by 9–13% annually, while lower-quality developments may show 5–6% growth or stability.

Segmentation of the market

Luxury new-build real estate in Moscow is not homogeneous. The segments differ in price, liquidity, risk, and upside potential.

-Upper business class (25–40 million rubles): large supply, relatively mass-market behavior, faster absorption, moderate price growth.

-Premium (40–100 million rubles): more limited supply, higher product quality, longer exposure periods, stronger price dynamics.

-De luxe (100+ million rubles): niche projects, very limited transactions, high price volatility depending on unit quality.

Each segment has its own market logic, and purchase strategies must reflect this. Misunderstanding segmentation is one of the most common mistakes among first-time buyers.