SOCIETY
Housing prices in Russian-occupied parts of the Ukrainian Donbas have risen by 30% to 40% since 2020. For most local residents, housing has become entirely unaffordable. Paradoxically, proximity to the front line is what makes the housing “elite” — it is being bought up by Russian soldiers who have been deployed to Donbas and want to sleep in apartments rather than in dugouts or barracks. As a result, despite constant strikes, interrupted water supply, and the general chaos of war, apartments in Donetsk can cost several times more than in the comparatively calm city of Rostov.
Under a listing for a three-room apartment in Luhansk, commenters expressed disbelief: “Shells are flying there, and they’re selling apartments for 11 million ($137,000). They’ve lost their minds. Better to buy in Volgograd, at least there’s water.”
Despite the ongoing fighting and destruction in the Russian-occupied territories of Donbas, housing prices have risen 30% to 40% over the past five years and continue to climb. Both sales and rentals are becoming more expensive. According to data from July 2025, a one-room apartment in Donetsk cost an average of 2.9 million rubles ($35,000), and the cheapest apartment in Luhansk (an unrenovated one-room unit on the first floor of a Khrushchev-era building) cost 2.5 million rubles ($30,000). By early August, the average price of a one-room apartment in Melitopol had risen to 3.8 million rubles ($46,000), while in Berdiansk it reached 3 million rubles ($36,000).
Luhansk real-estate agent Ihor Chernyshev, head of the Bastion real-estate agency, said the local property market thrived from 2007 to 2013, the final few years in which the city was under Ukrainian control. Many people took out mortgages in 2007, and in the three years before the war, rising salaries allowed residents to buy homes with cash.
However, after pro-Russian separatists seized control of Luhansk in 2014, real-estate prices collapsed. Another agent noted that a one-room apartment worth $25,000 to $30,000 under Ukrainian administration dropped to $5,000 after the first round of fighting began.
And yet, since the start of the full-scale invasion, prices have surged sharply again. Chernyshev said that five years ago he could not sell a two-room apartment for $7,000; now that the same unit sells for about 6 million rubles (around $61,000).
“Take a zero off”
Prices in Luhansk have risen even compared with 2024. Back then, a three-room apartment — Soviet-style décor and wall carpets included — could still be bought for 3.5 million rubles ($42,000).
Commenters on real estate sites today note that such a sum might not even be enough for a property in miserable condition: “The buildings are old, there are no courtyards, the roads are destroyed, the sewage leaks, and the biggest bonus is the cockroaches. And they want 5 million for that.”
Prices for houses and cottages range from 40 million to 200 million rubles ($485,000 to $2.42 million). For example, this house in Luhansk, with a wine cellar and two bathrooms, is listed at 35 million rubles ($423,000).
People in the comments under the listing didn’t hold back: “Half a million bucks? Seriously? Why so cheap? You can buy cottages in the Dominican Republic for less, but who needs them there? But in Luhansk — of course!”
A three-room apartment on the seventh floor of a nine-story building in a Luhansk residential district is listed at 7.3 million rubles ($90,000). “There’s no work and nowhere to go. When the war ends, you could buy the entire stairwell for that price,” wrote a commenter named Alexei.
This first-floor apartment needing renovation is being sold for 3.7 million rubles ($46,000):
And this 900-square-meter (0.22-acre) plot with a rundown structure is listed for 8.8 million rubles ($109,000):
Under many of the listings, people write comments along the lines of: “Take a zero off.” Many note that buying an apartment in Rostov, Krasnodar, or Tyumen would be cheaper.
But no one is planning to “take a zero off,” as supply remains low and heavy demand is pushing prices ever higher.
Sell it or lose it
Many Donbas residents have fled the Russian-occupied war zone, which in theory ought to drive prices down. But selling a home is not easy.
To do so, they must first return to the occupied city, and for Ukrainian passport holders, that means getting through checks at Moscow’s Sheremetyevo Airport, then traveling to Donbas. They must then obtain a Russian passport, without which they cannot legally prove ownership, a necessary step in the sale. Getting the necessary documents can take four months or more.
Even if they manage to collect all the papers and find a buyer, they then need to find a way to get the money out of Russia. By law, no more than $10,000 per person can be transported out of the country, so Ukrainians travel as families or transfer funds through cryptocurrency.
As a result, the real-estate agent said, 30% to 40% of apartments remain vacant because the owners either cannot return or are waiting for Russia to leave Luhansk.
In March 2024, occupation authorities decided to seize apartments that had not been entered into Russia’s real-estate registry, relying on a law regulating “unclaimed property.”
A Mariupol resident told The Insider that commissions go door to door looking for empty apartments. The addresses are then published online, and after three months the property is reclassified as unclaimed. After another ninety days, it becomes municipal property, and the former owner can defend their right to the apartment only in court — and only by presenting Russian documents.
Another risk is that “illegal tenants” may move into abandoned apartments. “When we left, I gave the keys to a neighbor,” said Natalia Olkhova, a displaced person from Mariupol. “Then the occupiers came, and the neighbor decided I didn’t need the apartment. He gave the keys to newcomers from Dagestan, and they changed the doors and windows and said: ‘We’re going to live here. If she wants her apartment back, she should come in person and bring the documents.’”
The risk of losing property has forced some apartment owners to return temporarily to sell what remains. But this has not significantly affected the market.
Damaged or destroyed
Housing supply is also limited because Russian forces have deliberately targeted residential areas during the invasion. In occupied Avdiivka, for example, only one out of 150 war-damaged apartment buildings had been restored as of early 2025.
Avdiivka after the fighting
A similar situation exists in Sievierodonetsk, Luhansk Region. The city was supposed to be rebuilt with financing from Russia’s Perm Krai. However, according to a report by the Luhansk regional military administration, the city remains in ruins, and only one-third of the apartments are inhabited.
Reports also say that in destroyed Bakhmut, damaged buildings are being dismantled for construction materials and transported to Mariupol, where93% of multi-story residential buildings (443 structures) have been damaged or destroyed. Representatives of the so-called “Donetsk People’s Republic” (“DPR”) claim that from 2022 to 2024, 70 new buildings were constructed in the city. But housing still falls far short of demand. Oleg Morgun, the former mayor of occupied Mariupol, said that by early 2025 the shortage of replacement housing amounted to 5,121 apartments.
In an effort to rid itself of this problem, in April 2024 the “DPR” “government” stopped providing replacement housing for those whose homes had been destroyed and instead switched to monetary compensation — 45,000 rubles per square meter despite market prices exceeding 100,000 rubles per square meter. According to local media, 20,000 Mariupol residents have been left without homes, yet only half of them qualify for compensation.
Residents of Mariupol who lost their homes to the fighting have recorded numerous appeals to Vladimir Putin, but there has been no response. New buildings financed by mortgages are being constructed on the sites of destroyed or deliberately demolished homes, and residents are offered apartments only through the compensation program, where waiting lists are long.
For wealthy Russians
As many locals remain effectively homeless, the demand surge pushing prices upward is created by those who can afford mortgages or have large sums of money on hand.
Ihor Chernyshev says that three residential complexes are currently being built in Luhansk — Vozrozhdenie, Aviator, and Krasnoyarsky — with the Druzhba and Dubrava new builds beginning construction. Prices there are higher than on the secondary market, at 110,000 to 160,000 rubles per square meter. He says local residents can afford, at best, a one-room apartment in these buildings — the rest are meant for wealthy Russians.
A building site in Mariupol. The image containing the render of the finished apartment block in the foreground reads “Military-Construction Complex of the Ministry of Defense of the Russian Federation”
Only one in three people looking to buy property in Mariupol is a local resident, Natalia Martynova, CEO of the developer Evolution told state-controlled news outlet RIA Novosti. “Demand mainly comes from residents of other regions of Russia who came to the republic for reconstruction work and decided to stay permanently. Most buyers are from Moscow, St. Petersburg, Yekaterinburg, Novosibirsk, and Russia’s northern regions,” Martynova noted.
Developers like Martynova, as well as federal and occupation authorities, are trying to lure buyers from other regions by claiming the area has “investment potential,” supposedly helped by a “favorable climate and proximity to the sea.” Media coverage presents a positive picture: cities being actively settled by builders, civil servants, cultural workers, doctors, teachers, and other professionals arriving to “restore life” to these “historically Russian” cities.
In reality, Donbas, which is not considered a “warm” region in Ukraine, was never a place where Ukrainians bought vacation homes. Before 2014, the region’s real-estate market was driven by industrial employment and relatively high salaries. In the current book, the people with deep pockets are primarily Russian military personnel who are looking for a place to invest their large payouts. In Luhansk, for example, real-estate prices surged after service members’ salaries spiked in connection with the start of the “special military operation.”
Better in an apartment than in a barracks
Irina lives in the village of Mangush in the Mariupol District. She sees Russian soldiers regularly, including in local stores. “There are lots of soldiers driving around the village. They live in houses — even in the ones next door, I know they live there. Whether they bought them, rented them, or seized them [by force], that I don’t know,” Irina said.
Marina, from Horlivka, said apartments close to the front line are often purchased by those doing the fighting: “Realtors assume soldiers from the ‘special military operation’ will buy [the properties] anyway. The prices are insane, and they are profiting.”
In Luhansk, where the front line is much farther away, the situation is somewhat different, although there are also many Russian soldiers. A Luhansk resident named Inna said she sees them often, for example, armed inside a pharmacy. She assumes they are unlikely to be taking part in active combat and believes they simply live in Luhansk.
Another Luhansk resident, Olga, said soldiers from Bashkortostan live near her. According to real-estate agents, along with Bashkir troops, people from Chechnya and several Siberian regions have relocated to occupied areas of Ukraine. These are primarily military personnel and their families.
Russian-occupied Donetsk in eastern Ukraine
As an added incentive, a subsidized 2% mortgage on secondhand housing is still available in the occupied territories. Formally, only local residents are eligible, but one real-estate agent told The Insider that this requirement is often bypassed: “A scenario where an officer from, say, the National Guard brings his family, and the wife applies for the ‘2% mortgage,’ is entirely realistic.”
No outsiders on the market
If anyone is receiving “resort-like” treatment in Donbas, it is developers. Most contracts go to companies with personal ties to senior officials at the highest levels. According to the Construction Ministry, 37 companies are building 135 housing complexes in the so-called “new regions.”
Doing business in territories with an uncertain legal status — to say nothing of the active hostilities nearby — requires state guarantees and incentives. Developers receive land plots for free, and utilities are installed through a federal reconstruction program.
Ilya Shumanov, director of the Arktida project, told The Insider that the Russian Construction Ministry uses a closed list of approved contractors that are permitted to work in the occupied territories. There are 17 organizations on the list. “These companies are supposed to divide a pie worth 1.5 trillion rubles ($18.6 billion) for reconstruction,” he said.
A Russian soldier guarding a building site in occupied Mariupol. Photo: Sergei Ilnitskiy / EPA-EFE
According to Shumanov, the list is almost exclusively made up of companies with ties to the authorities. “For example, there are companies linked to the state road agency Avtodor. There is EXC (ЭКС), which is linked to the GRU. There are individuals connected to oligarch circles, and so on,” he said.
Where will prices go next?
Real-estate prices in the occupied territories will continue to rise over the next year, especially for new construction, said Shumanov, who expects an increase of at least 10% to 15%. The limited amount of new units coming online, the incentives given to soldiers serving in the war-torn regions, and the rising price of construction materials all contribute to this trend.
Shumanov said that if the war continues, demand — and therefore prices — will begin to fall within three years, especially in areas near the front line.
In the longer term, Shumanov said, the situation will develop along the lines of Crimea: “The population will be half the size of the housing stock, and within ten years the government will complete its major programs. The effect of subsidies will disappear, and market mechanisms will take over, inevitably driving prices down.”
If the territories occupied by Russia return to Ukrainian control, the price collapse will come even faster, as demand from Russian buyers will disappear. Moreover, the issue of restitution will arise given that Ukraine does not recognize real-estate transactions carried out in occupied regions.