Russia economy meltdown as car sales slump 30% and property revenues plummet

Russia's already struggling economy faces a double blow as car sales plummet alongside a burgeoning property crisis. Car sales across the country dropped by 29.7% year-on-year in June. A total of 140,161 new cars were sold in Russia during this period, a decrease from the 199,398 cars sold during the same period last year, as per a report by the Association of European Businesses (AEB).

Despite this being a considerable decline, it was less severe compared to previous months: car sales fell by 37.6% in May, 41% in April and 42.5% in March year-on-year. Roughly 200 dealerships have closed since the start of the year, representing 5% of those across the country. Alexey Podschekoldin, head of the Russian Automobile Dealers Association, told Autonews that another 30% of dealerships face financial pressures and are at risk of closing.

He added that the current economic climate means that the automobile market is not profitable for manufacturers or dealerships.

The average car brand in Russia sells just 12,900 per year, a whopping 28 times less than the US, despite having nearly three times as many brands in the country.

Russia's once-thriving property market has also been plunged into crisis, with sales of new flats plummeting by nearly 39% over the past year, according to recent government data.

From July 2024 to June 2025, a mere 458,727 flats were sold nationwide, marking a staggering 38.7% drop in transactions compared to the previous 12 months.

The total area of property sold decreased by 37.2%, down to 21.9 million square metres, as per a report by the state-owned housing company Dom.RF.

Real estate platform Cian also noted a 39% decline in property deals year-on-year, down to 477,000 units.

Data from Dom.RF also revealed a 27% year-on-year decrease in new construction equity agreements over the past six months, indicating the continued stagnation in the property sector.