Modelling Determinants of the Price Gap Between the Primary and Secondary Housing Markets

Abstract

The study explores factors responsible for the price gap between the primary and secondary housing markets in Russian regions. We draw on 2022–2025 data, panel data models and spatial fixed effects models to show that the magnitude of the gap depends, beyond macroeconomic conditions, on the structure of developer markets and financial inclusion, with a high concentration of developers widening the gap and competition between banks easing it. While the gap is heavily influenced by Family Mortgage loans, the 2024 rollback of universally available subsidised mortgages did not produce any significant effect. Our findings suggest that the institutional environment should be taken into account in formulating housing market policy.