Mic Drop: Russia’s unexpected wartime real estate boom

Summary

Podcast Summary: Click Here – "Mic Drop: Russia’s Unexpected Wartime Real Estate Boom"

Release Date: July 11, 2025
Host: Dina Temple-Raston, Recorded Future News

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Introduction

In the July 11, 2025 episode of Click Here, titled "Mic Drop: Russia’s Unexpected Wartime Real Estate Boom," host Dina Temple-Raston delves into an unconventional narrative emerging from rural Russia amidst the ongoing conflict stemming from the invasion of Ukraine. Contrary to typical wartime devastation characterized by displacement and economic ruin, certain Russian towns are experiencing a surprising surge in their housing markets. This episode provides an in-depth exploration of the factors driving this unexpected real estate boom, featuring insights from Stan, a tech professional who initially left Russia following the invasion but has since returned.

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Rural Russia’s Housing Market Explosion

Stan's Perspective on Economic Shifts

Stan offers a grassroots economic analysis, shedding light on how rural areas in Russia are defying wartime economic hardships. He explains that the housing market boom isn't limited to major cities like St. Petersburg but is particularly pronounced in the countryside. "It's not only in the countryside. In my city, St. Petersburg is the second biggest city, like 5 million people. But I think that the percentage of that. That who accept this in the countryside is much higher," Stan observes (04:15).

Military Recruitment and Economic Incentives

A significant driver behind the housing surge is the Kremlin's strategic recruitment of military personnel through lucrative financial incentives. Military billboards proliferate across the landscape, advertising substantial salaries to attract new recruits. “They’re trying to attract new crews, but they pay like $20,000 for enrollment and also like $2,000 per month. So it's a big salary for the average person” (03:00). For individuals facing economic hardships, such as high debt or legal troubles, these military salaries offer an irresistible opportunity compared to the national average wage of approximately $800 per month.

Impact on the Real Estate Market

The influx of military recruits with substantial incomes has had a cascading effect on the real estate sector. Stan notes, “They can buy or rent bigger apartments for the realtor. This recruit is more valuable than an entrepreneur because they have lower risk” (05:37). Real estate agents find these recruits to be highly desirable clients, leading to increased property sales and development even amidst stringent sanctions and a faltering economy.

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Government Intervention and Mortgage Subsidies

Subsidizing Home Loans

Despite the Russian government's efforts to tighten lending terms and reduce state subsidies for mortgages since the previous summer, the high military salaries have mitigated the impact of these restrictions. Previously, mortgage rates were around 8%, but with the government's pullback on subsidies, there was a potential for a slowdown. However, the advent of military salaries has sustained the demand for housing, enabling continued growth in the property market.

Realtors’ Preferences

Realtors express a clear preference for selling properties to military recruits over other segments of society. “They would rather sell to a military recruit than to who they know will get money than a guy like you who maybe might not always have money coming in” (05:52). This preference underscores the perceived financial stability that military personnel bring to the real estate market.

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Deathonomics: The Dark Side of Economic Boost

Introduction to Deathonomics

Transitioning from economic growth, the podcast introduces the concept of "deathonomics," a term coined to describe the financial infusion into the economy through death benefits paid to the families of fallen soldiers. Alexandra Prokopenko, a researcher at the Carnegie Russian Eurasia Centre in Berlin, provides critical insights into this phenomenon.

Economic Implications of Military Casualties

“The Russian government is not just paying for recruits, they're paying for deaths on the battlefield, too. A 35-year-old man who fights for at least a year and is killed in battle could have survivor benefits of some $150,000” (08:13). These payments are effectively transferring vast sums of money to survivors, which has inadvertently stimulated economic activity, particularly in the real estate market. Prokopenko reveals that a significant portion of these benefits results from the high casualty rates, with some estimates suggesting that the average time between recruitment and death is mere weeks or months.

Economic Disparities and Ethical Concerns

Stan shares personal anecdotes highlighting the uneven benefits of this system. While those involved in defense-related industries prosper, others struggle. “Stan returned to Russia a few months ago and he's had to ask relatives for loans until he gets back on his feet” (10:12). In contrast, a relative in the cargo business benefiting from wartime activities expresses unprecedented business success, further emphasizing the disparities fueled by the war economy.

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Societal Sentiments and Economic Pressures

Eroding Patriotism and Rising Skepticism

Stan observes a shift in societal attitudes towards the war. “There is no flags anymore. I think maybe, like, still 10% of that that were, like, two years ago. So I think that the locals, they understand now that they are not so emotional like, we will win and so brave” (06:29). The initial wave of patriotism, marked by widespread display of Russian flags and a strong nationalistic fervor, has waned as economic hardships take their toll.

Inflation and Cost of Living Crisis

The Russian ruble has depreciated significantly, dropping to approximately 114 against the US dollar, though it has seen some recovery. Inflation rates have skyrocketed, with essential commodities like bread, apples, and milk increasing by 12%, 14%, and 15% respectively over the past year. “[Stan:] When you go to the shop, you understand that we have problems” (07:07). These economic pressures contribute to a strained quality of life for many Russians, despite the apparent boom in certain sectors.

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Future Outlook and Concluding Insights

Sustainability of Economic Growth

Stan is skeptical about the long-term sustainability of the current economic trajectory. “So I hope that he [President Trump] will find the way to arrange this peace. I don't know, but I'm not sure. I'm skeptical. I think that Russian economy will fall down because all the money is spent to the war and all the other areas like health care” (12:23). The heavy allocation of resources towards national defense at the expense of other critical sectors creates an overheating economy that is vulnerable to collapse as sanctions continue to exert pressure.

Infrastructure Challenges

Further compounding economic woes are the deteriorating infrastructures, such as poorly maintained apartment buildings where “every person who will go to this 15th floor by foot will understand that there are some sanctions that are working” (12:23). These signs are tangible indicators of the broader economic struggles faced by the nation.

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Closing Remarks

Click Here's exploration of Russia's wartime real estate boom unveils a complex interplay between military recruitment incentives, government subsidies, and the tragic economic benefits derived from high casualty rates. While certain sectors experience growth, the overarching sentiment remains one of economic strain and diminishing patriotic fervor. The episode underscores the multifaceted and often paradoxical nature of wartime economies, offering listeners a nuanced understanding of the underlying dynamics shaping contemporary Russia.

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Notable Quotes with Timestamps:

• Stan on City vs. Countryside Recruitment:

  “It’s not only in the countryside. In my city, St. Petersburg is the second biggest city, like 5 million people. But I think that the percentage of that. That who accept this in the countryside is much higher.”
  [04:15]

• Military Salaries Attractiveness:

  “They pay like $20,000 for enrollment and also like $2,000 per month. So it’s a big salary for the average person.”
  [03:00]

• Realtors' Preference for Military Recruits:

  “They would rather sell to a military recruit than to who they know will get money than a guy like you who maybe might not always have money coming in.”
  [05:52]

• Stan on Waning Patriotism:

  “There is no flags anymore. I think maybe, like, still 10% of that that were, like, two years ago. So I think that the locals, they understand now that they are not so emotional like, we will win and so brave.”
  [06:29]

• Economic Skepticism:

  “So I hope that he [President Trump] will find the way to arrange this peace. I don't know, but I'm not sure. I'm skeptical. I think that Russian economy will fall down because all the money is spent to the war and all the other areas like health care.”
  [12:23]

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This episode of Click Here offers a compelling examination of how wartime dynamics can lead to unexpected economic outcomes, while also highlighting the profound human and ethical costs associated with such phenomena.

Transcript

[Dena Temple Raston]

From Recorded Future News and prx, this is Click Here. Hey, it's Dena. The Click Here team is taking a short summer breather. Today. We're returning to a story that challenged our assumptions. When we think of war, we think of displacement, ruin, exodus. But in rural Russia, some towns have seen just the opposite. They're seeing housing markets boom. So while sanctions and fear might have rearranged the map, for some, it's created opportunity. Take a listen. When did we last speak? We thought maybe 20, 22 or something like that.

[Stan]

Yeah, I think it's. I don't know. So many things changed from this time. So, yeah.

[Dena Temple Raston]

I'm Dena Temple Raston and this is Click Here's Mic Drop, an extended interview we think you'd like to hear more of. We brought you the story of Stan, a tech guy who was part of the exodus of professionals who left Russia in the months after the invasion of Ukraine. He has since returned home. On today's Mic Drop, we get a sort of grassroots economic analysis from Stan. And the parts of society he sees thriving or declining as we enter the third year of the war may surprise you. Stay with us. Click Here is brought to you by Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy to see if you could save when you bundle your home and auto policies. Try [e-mail] Progressive Casualty Insurance Company and affiliates. Potential savings will vary. The not available in all states. I'm Dina Temple Roast and this is Click Here's Mic Drop. There's this surprising thing happening in Russia. Their economy in the middle of a war and heavy sanctions is kind of defying expectations. The Kremlin is managing to goose economic growth not just in a traditional way by having factories run around the clock to produce weapons, but in more subtle ways, too, like with these military billboards Dan says are everywhere you look these days.

[Stan]

You see a lot of ads for who they want.

[Dena Temple Raston]

Military.

[Stan]

Military, they. They're trying to attract new crews, but they pay like $20,000 for enrollment and also like $2,000 per month. So it's a big salary for the average person.

[Dena Temple Raston]

Stan said this recruiting is attractive not just for your average person, but to Russians who are in debt or have had run ins with the law. They're all signing up for a very basic reason. In a place where the average wage is about $800 a month, these kinds of military salaries are hard to resist.

[Stan]

For them, it's a big chance, big lift. If they survive.

[Dena Temple Raston]

That is a big if, of course. But for a lot of people, it seems taking the risk has become a rational economic choice, and it's turned rural areas in Russia into boom towns. We have been reading that these salaries are really changing the economy in the countryside and the farming lands. Is that true?

[Stan]

It's not only in the countryside. In my city, St. Petersburg is the second biggest city, like 5 million people. But I think that the percentage of that. That who accept this in the countryside is much higher. But also when I speak with the realtors, they say that these recruits, they're a great client for the realtors.

[Dena Temple Raston]

So, Stan, is there a housing boom?

[Stan]

Yes, yes, yes. The effect on the property.

[Dena Temple Raston]

That'S right. In the middle of sanctions and a war, there's a housing boom. Somehow, against all odds, builders are building, banks are lending, and people are buying. Part of it is the government stepping in and subsidizing mortgages like crazy. Last summer, Russian home buyers were getting mortgages for about 8%. Since then, the government has been tightening lending terms and reducing state subsidies. But Stan says now these huge military salaries are picking up the slack. Suddenly, a whole new swath of society is looking to buy.

[Stan]

They can buy or rent bigger apartments for the realtor. This recruit is more valuable than an entrepreneur because they have lower risk.

[Dena Temple Raston]

So they would rather sell to a military recruit than to who they know will get money than a guy like you who maybe might not always have money coming in.

[Stan]

Yeah. Yeah.

[Dena Temple Raston]

Wow. That's crazy.

[Stan]

That's crazy. Yeah.

[Dena Temple Raston]

But as happy as these recruits who survived the war may be with their newfound wealth, Stan says the overall sentiment about the war isn't quite so enthusiastic. Enthusiastic, at least not compared to the beginning of the war when there were Russian flags fluttering from every rooftop and a huge patriotic movement.

[Stan]

There is no flags anymore. I think maybe, like, still 10% of that that were, like, two years ago. So I think that the locals, they understand now that they are not so emotional like, we will win and so brave.

[Dena Temple Raston]

Which may have a lot to do with the cost of living there right now for anyone. Without that military subsidy.

[Stan]

When you go to the shop, you understand that we have problems.

[Dena Temple Raston]

Food staples have become especially Expensive.

[Stan]

Bread up 12% over the last year.

[Dena Temple Raston]

Apples up 14%.

[Stan]

Milk up 15%. Cat.

[Dena Temple Raston]

The Russian ruble has been falling to levels we haven't seen since the earliest days of the war. Recently, it tumbled to about 114 against the US dollar, though it's clawed back some ground since then. Putin has just approved a budget for 2025 that sets aside some $126 billion for national defense and accounts for nearly a third of the government's overall spending. With inflation accelerating, analysts say the Russian economy is overheated. When we come back, we look at something bleaker. Deathonomics. That's after the break. Stay with us. Jan Marsalek was a model of German corporate success.

[Stan]

It seemed so damn simple for him. Also, it turned out, a fraudster. Where does the money come from? That was something that I always was questioning myself.

[Dena Temple Raston]

But what if I told you that was the least interesting thing about him?

[Stan]

His secret office was less than 500 meters down the road.

[Dena Temple Raston]

I often ask myself now, did I.

[Stan]

Know the true Rian at all? Certain things in my life since then have gone terribly wrong.

[Dena Temple Raston]

I don't know if they followed me to my home. It looks like the ingredients of a really grand spy story because this ties together the Cold War with the new one. Listen to hot agent of Chaos wherever you get your podcasts. The Russian government is not just paying for recruits, they're paying for deaths on the battlefield, too. A 35 year old man who fights for at least a year and is killed in battle could have survivor benefits of some $150,000. One economist told the Wall Street Journal that's the equivalent of what he'd make working until the age of 60. In some Russian regions, economists are now calling it deathonomics. Alexandra Prokopenko is a researcher and fellow at the Carnegie Russian Eurasia center in Berlin. And she says a lot of these recruits who took the signing bonus and monthly salary have actually died. Oh, most of them are actually dead. So people just selling lives of their loved ones, of their relatives for money. Those who are more successful survive, but they can be injured and lost their health and their ability to work for the end of their life. Alexandra said casualties on the battlefield are so enormous that some estimates say the average time between recruitment and death is just weeks or a few months. So they're signing contract with Ministry of Defense, getting payments to their relatives and in 10 days, because Russia now conducting offensive new record can be dead. So many soldiers have now been killed. The payments are thought to have poured some $30 billion into survivors pockets and the Russian economy at large. That means widows are now buying apartments their husbands would have otherwise spent their whole lives saving for. Stan returned to Russia a few months ago and he's had to ask relatives for loans until he gets back on his feet. In the past, he was the person people in his family came to when they needed money. He has this relative in the cargo business.

[Stan]

He is feeling great of his business because they're transiting everything for war. So his business is going up. So I asked him to borrow some money. He said that he never felt this success before.

[Dena Temple Raston]

Right. So if someone is in the defense industry or helping the military, they're doing great. But maybe not everybody.

[Stan]

Yeah. But you know what's funny? This guy is making services for, for army, but his parents are living in Crimea, which is very close to this. So it sounds like it's okay that you make this business and your parents are there. Like, for me, it was not ethical, but for him it's okay.

[Dena Temple Raston]

Stan says of all things, he's counting on President Trump. He hopes somehow he can convince Putin to end the war.

[Stan]

So I hope that he will find the way to arrange this peace. I don't know, but I'm not sure. I'm skeptical. I'm. I think that Russian economy will fall down because all the money is spent to the war and all the other areas like health care. Even these elevators in the, in the apartment buildings, in the apartment buildings are imported and the government is not investing in the new ones. So every person who will go to this 15th floor by foot will understand that there are some sanctions that are working.

[Dena Temple Raston]

From Recorded Future News, the this has been Click Here's Mic Drop. It was written and produced by Megan Dietrich, Sean Powers, Erica Gaeta, Zach Hirsch, Lucas Riley, and me, Dina Templest. It was edited by Karen Duffin. We'll be back on Tuesday. Have a great weekend. Looking for more of the cybersecurity and.

[Stan]

Intelligence coverage you get on Click Here.

[Dena Temple Raston]

Then check out our sister publication, the Record. From Recorded Future News, you'll get breaking.

[Stan]

Cyber news from reporters in New York.

[Dena Temple Raston]

Washington, London and Kyiv, among others. And you'll see for yourself why it attracts hundreds of thousands of page views every month. Just go to therecord Media.