Rented units ready for occupancy.

In the Russian real estate market, the long-term rental sector has been experiencing steady growth over the past few years. According to data from Expert RA, as of the end of 2024, the average yield in Moscow was 5.7%, in St. Petersburg - 6.1%, and in other cities - 6.2%.

This growth trend is driven by a rise in demand for long-term rentals. In July 202x, there was a 2% year-on-year increase in demand for long-term rentals in Russia. This demand is expected to continue, with the rental market growth projected to reach 349 million square meters by 2027, representing a 10.8% increase.

The increase in rental market offerings is attributed to a rise in prices due to the reduced affordability of mortgages. By 2025, rental rates could increase by an average of 9.75% compared to 2024 levels, according to Expert RA. By 2030, rental rates could increase by 42.4% compared to 2024 levels.

The rental market growth is not limited to Moscow and St. Petersburg. In cities like Samara, the average cost of one-bedroom apartments increased by 20% year-over-year, reaching around 24,000 rubles per month in September 202x.

Analysts consider the yields in long-term rental housing in Russia as acceptable for investment, but they note that they are lower than the potential gains from investing in OFZs and bank deposits. Despite this, the rise in rental rates, despite being modest in comparison to other investments, is still encouraged by the increasing prices due to reduced affordability of mortgages.

By 2030, the rental offering's share of Russia's total residential housing stock is expected to reach 10%. The rental offering is projected to reach 458 million sq. m by 2030, representing an 82.5% increase from 2025. The rating agency "Expert RA" expects that by 2030, the total amount of housing available for the rental market in Russia will increase to 225 million square meters of new housing stock annually.

Interestingly, the rental market in many foreign countries has a higher percentage of apartments rented. For instance, Switzerland has 62%, Germany has 55%, the UK has 31%, Canada has 30%, and Italy has 20% of their residential housing stock in the rental market.

In terms of the commercial rental market, it is also expected to grow. In 2026, the commercial rental market could grow by 11.7% to 315 million sq. m. The total volume of housing available for market rental in 2025 is forecast to be 282 million sq. m, an increase of 12.4% year-on-year. By 2030, the rental offering's share of Russia's total commercial housing stock is expected to reach significant levels.

In conclusion, the Russian long-term rental market is showing promising growth trends, driven by increasing demand and the impact of reduced mortgage affordability. While yields may be lower than some other investment options, the steady growth and potential for future increases make it an attractive option for investors.