SFeDu
of.211, Gorgoko St., 88 
Rostov-on-Don
Russia
344002
+7 (863) 250-59-54
This email address is being protected from spambots. You need JavaScript enabled to view it.
te@sfedu.ru

TERRA ECONOMICUS

  • Home
  • Issues
  • 2025
  • No 4
  • Divergence of price determinants in the Russian housing market: A SHAP analysis of primary and secondary segments

Divergence of price determinants in the Russian housing market: A SHAP analysis of primary and secondary segments


TERRA ECONOMICUS, Vol. 23, No 4

Citation: Badykova I.R. (2025). Divergence of price determinants in the Russian housing market: A SHAP analysis of primary and secondary segments. Terra Economicus 23(4), 86–102 (in Russian). DOI: 10.18522/2073-6606-2025-23-4-86-102


The relevance of this study stems from the heightened volatility of Russia’s housing market, exacerbated by the Central Bank’s benchmark interest rate hikes, pronounced regional heterogeneity, and insufficient examination of non-linear interactions among price determinants under institutional constraints. The research aims to identify and analyze key factors shaping price dynamics across primary and secondary housing market segments in Russian regions, accounting for their interrelationships and temporal and spatial specificities. I test hypotheses concerning fundamental divergences in the structure of factors, the asymmetric impact of crisis shocks, and the significance of latent institutional and regional effects. Empirically, the study employs panel data from 79 Russian federal subjects (2013–2023, 869 observations), analysed through an integrated methodology combining machine learning techniques with SHAP (SHapley Additive exPlanations) analysis to interpret complex non-linear dependencies. Results confirm the hypotheses: primary markets are dominated by minimum subsistence levels, oil prices, and household debt burdens, whereas secondary markets respond to population size and household incomes. The 2014 and 2022 crises induced extreme price surges in the primary segment. Negligible contributions from standard variables in Moscow and St. Petersburg indicate an ‘institutional premium’ for transactional opacity. The scientific novelty lies in pioneering the quantification of factor interactions for Russia and evidencing systemic pricing distortions (‘capital cities paradox’). Conclusions advocate for differentiated regulatory approaches that account for the identified market segment divergence. The market’s core specificity is price formation under dual pressures from economic fundamentals and institutional frictions.

Keywords: housing market; housing price; macroeconomic determinants; regional disparities; machine learning; SHAP analysis
JEL codes: P25, R31; D23


References:
  • Bedin, B., Gusak, A. (2017). Factors influencing the price dynamics of the real estate market. Izvestiya BSU 27(2), 154–161 (in Russian)
  • Galiullina, G., Habibullina, A., Hannanova, S. (2022). State regulation of the real estate market in Russia: Modern challenges and problems. Bulletin of the Altai Academy of Economics and Law 11(2), 221–225 (in Russian)
  • Lisikh, V., Romanova, M., Scherbatov, M. (2022). Analysis of the influence of external and internal factors on pricing in the real estate market in Russia. Actual problems of management, economics and economic security: Proceedings of the IV International Scientific Conference, Kostanai, 10–11 November 2022 (pp. 114–116). Cheboksary (in Russian)
  • Lysenko, G. (2025). Macroeconomic factors of housing prices in Russia. Voprosy Ekonomiki (1), 92–114 (in Russian)
  • Lyubarskaya, M., Glazkov, K. (2023). The importance of regional property markets for modern economy. Economic Vector (2), 48–50 (in Russian)
  • Nikitina, N. (2023). Analysis of factors affecting the dynamics of residential property prices in Russia. Finance: Theory and Practice 27(1), 208–220 (in Russian)
  • Adams, Z., Füss, R. (2010). Macroeconomic determinants of international housing markets. Journal of Housing Economics 19(1), 38–50. DOI: 10.1016/j.jhe.2009.10.005
  • Belke, A., Keil, J. (2018). Fundamental determinants of real estate prices: A panel study of German regions. International Advances in Economic Research 24, 25–45. DOI: 10.1007/s11294-018-9671-2
  • Bogatyreva, M., Leskinen, M., Kolmakov, M. (2021). The domestic real estate market during financial crises. IOP Conference Series: Earth and Environmental Science 751, 012134. DOI: 10.1088/1755 1315/751/1/012134
  • Chen, J., Zhang, H., Zhou, Q. (2021). Rule by law, law-based governance, and housing prices: The case of China. Land 10(6), 616. DOI: 10.3390/land10060616
  • Cohen, V., Karpaviciute, L. (2017). The analysis of the determinants of housing prices. Independent Journal of Management & Production 8(1), 49–63. DOI: 10.14807/ijmp.v8i1.521
  • Ersoz, F., Ersoz, T., Soydan, M. (2018). Research on factors affecting real estate values by data mining. Baltic Journal of Real Estate Economics and Construction Management 6(1), 220–239. DOI: 10.2478/bjreecm-2018-0017
  • Follain, J., Jimenez, E. (1985). Estimating the demand for housing characteristics: A survey and critique. Regional Science and Urban Economics 15(1), 77–107. 101 I.R. BADYKOVA / TERRA ECONOMICUS, 2025, 23(4), 86–102
  • Glindro, E., Tientip, S., Jessica, S., Haibin, Z. (2008). Determinants of house prices in nine Asia-Pacific economies. Bureau of International Settlements Working Paper № 263.
  • Goodman, A. (1978). Hedonic prices, price indices and housing markets. Journal of Urban Economics 5(4), 471–484. DOI: 10.1016/0094-1190(78)90004-9
  • Guan, Y., Cheung, K.-S. (2023). The costs of construction and housing prices: A full-cost pricing or tendering theory? Buildings 13(7), 1877. DOI: 10.3390/buildings13071877
  • Guzikova, L., Plotnikova, E., Kolesnikov, A. (2017). Assessment of the effectiveness of the housing policy implementation in the regions of Russia. Scientific journal NRU ITMO 4(31). DOI: 10.17586/2310 1172-2017-10-4-3-15
  • Han, S., Shin, M. (2021). Housing prices and government approval: the impact of housing booms on left- and right-wing governments in 16 advanced industrialized countries. Canadian Journal of Political Science 54(1), 163–185. DOI: 10.1017/S0008423920001262
  • He, S. (2020). Regional impact of rail network accessibility on residential property price: modelling spatial heterogeneous capitalisation effects in Hong Kong. Transportation Research Part A: Policy and Practice 135, 244–263. DOI: 10.1016/j.tra.2020.01.025
  • Hill, R. (2011). Hedonic price indexes for housing. OECD Statistics Working Papers № 1. DOI: 10.1787/5kghzxpt6g6f-en
  • Hlaváček, M., Komárek, L. (2011). Regional analysis of housing price bubbles and their determinants in the Czech Republic. Czech Journal of Economics and Finance 61(1), 67–91.
  • Ho, W., Ganesan, S. (1998). On land supply and the price of residential housing. Journal of Housing and The Built Environment 13, 439–452. DOI: 10.1007/bf02497028
  • Ihlanfeldt, K. (1982). Income Elasticities of Demand for Rental Housing: Additional Evidence. Urban Studies 19(1), 65–69. DOI: 10.1080/00420988220080061
  • Kalabiska, R., Hlavacek, M. (2022). Regional Determinants of Housing Prices in the Czech Republic. Czech Journal of Economics and Finance 72(1), 2–29. DOI: 10.32065/CJEF.2022.01.01
  • Kallberg, J., Shimizu, Y. (2025). Crime measures and housing prices: An analysis using quantile regression and spatial autocorrelation. Journal of Real Estate Finance and Economics, ahead-of print. DOI: 10.1007/s11146-024-09997-w
  • Ke, X. et al. (2023). Impact of different ecological landscapes on housing prices – empirical evidence from wuhan through the hedonic pricing model appraisal. Journal of Housing and the Built Environment 38, 1289–1308. DOI: 10.1007/s10901-022-09990-w
  • Kholodilin, K., Ulbricht, D. (2015). Urban house prices: A tale of 48 cities. Economics 9(2015-28), 1–43. DOI: 10.5018/economics-ejournal.ja.2015-28
  • Larkin, M. et al. (2019). Do house prices ride the wave of immigration? Journal of Housing Economics 46, 101630. DOI: 10.1016/j.jhe.2019.04.002
  • Li, L., Wong, S., Cheung, K. (2016). Land supply and housing prices in Hong Kong: The political economy of urban land policy. Environment and Planning C: Government and Policy 34, 981–998. DOI: 10.2139/ssrn.3767204
  • Long, H., Trung-Kien, P. (2024). Does urbanization drive up housing prices? Novel evidence from remote sensing and dynamic panel quantile regression. International Journal of Housing Markets and Analysis, ahead-of-print. DOI: 10.1108/IJHMA-06-2024-0081
  • Miles, D. (2012). Population density, house prices and mortgage design. Scottish Journal of Political Economy 59. DOI: 10.1111/j.1467-9485.2012.00589.x
  • Nicholls, S. (2019). Impacts of environmental disturbances on housing prices: A review of the hedonic pricing literature. Journal of Environmental Management 246, 1–10. DOI: 10.1016/j.jenvman.2019.05.144
  • Nikpey, V., Mohammadzadeh, Y., Rezazadeh, A., Samani, H. (2024). Spatial analysis of dependency culture resulting from exchange rate fluctuations on herding behavior in Iran’s housing market. International Journal of Housing Market and Analysis, ahead-of-print. DOI: 10.1108/IJHMA-09-2024-0137 102 И.Р. БАДЫКОВА / TERRA ECONOMICUS, 2025, 23(4), 86–102
  • Owusu-Ansah, A. (2013). A review of hedonic pricing models in housing research. A Compendium of International Real Estate and Construction Issues 1(1), 19–38.
  • Owusu-Ansah, A., Azasu, S., Thantsha, W. (2025). The effect of school quality on house prices in the global south: Evidence from South Africa. International Journal of Housing Markets and Analysis 18(1), 70–86. DOI: 10.1108/IJHMA-05-2023-0066
  • Habinshuti, Ph., Mulyugi, P. (2020). Influence of gross domestic product (GDP) on real estate prices in Rwanda. International Journal of Innovative Research and Development 9(4), 77–82. DOI: 10.24940/ijird/2020/v9/i4/APR20041
  • Polinski, M., Ellwood, D. (1979). An empirical reconciliation of micro and grouped estimates of the demand for housing. Review of Economics and Statistics 61(2), 199–205. DOI: 10.2307/1924587
  • Salifu, M., Peprah, J., Cantah, W. (2024). Legal systems, property rights, and financial development in Sub-Saharan Africa. SAGE Open 14(2). DOI: 10.1177/21582440241257932
  • Sanchis-Guarner, R. (2023). Decomposing the impact of immigration on house prices. Regional Science and Urban Economics 100, 103893. DOI: 10.1016/j.regsciurbeco.2023.103893
  • Somerville, C. (1999). Residential construction costs and the supply of new housing: Endogeneity and bias in construction cost indexes. Journal of Real Estate Finance and Economics 18, 43–62.
  • Stepanyan, V., Poghosyan, T., Bibolov, A. (2010). House price determinants in selected countries of the former Soviet Union. International Monetary Fund, IMF Working Papers № 10.
  • Tian, P., Xiao, W., Yuan, F. (2025). Assessing the combinational effects of access to urban amenities on housing prices: A perspective on the “15-minute city”. Applied Spatial Analysis and Policy 18, 29. DOI: 10.1007/s12061-025-09638-6
  • Tripathi, S. (2019). Macroeconomic determinants of housing prices: A cross country level analysis. MPRA Paper № 98089. https://mpra.ub.uni-muenchen.de/98089/1/MPRA_paper_98089.pdf (accessed on June 16, 2025)
  • Unal, U., Hayo, B., Erol, I. (2024). The effect of immigration on housing prices: Evidence from 382 German districts. SSRN Electronic Journal. DOI: 10.2139/ssrn.4325192
  • Vonlanthen, J. (2023). Interest rates and real estate prices: A panel study. Swiss Journal of Economics and Statistics 159, 6. DOI: 10.1186/s41937-023-00111-0
  • Yang, L., Chau, K., Szeto, W., Cui, X., Wang X. (2020). Accessibility to transit, by transit, and property prices: Spatially varying relationships. Transportation Research Part D: Transport and Environment 85, 102387. DOI: 10.1016/j.trd.2020.102387
  • Weida, X., Peng, L. (2015). Inflation and house prices: Theory and evidence from 35 major cities in China. International Real Estate Review 18(2), 217–240.

Publisher: Southern Federal University
ISSN: 2073-6606