Click Here Podcast: Mic Drop Episode Summary Title: Mic Drop: Russia’s Unexpected Wartime Real Estate Boom
Host: Dina Temple-Raston
Release Date: January 10, 2025

Introduction

In the latest episode of Click Here titled "Mic Drop: Russia’s Unexpected Wartime Real Estate Boom," host Dina Temple-Raston delves into the surprising economic developments unfolding in Russia amidst the ongoing conflict with Ukraine and severe international sanctions. Through an extended interview with Stan, a former tech professional who returned to Russia after initially fleeing the country, the episode explores grassroots economic shifts, the emergence of a housing boom, and the troubling phenomenon dubbed "deathonomics."

The Unexpected Housing Boom

Contrary to expectations of economic stagnation due to war and sanctions, Russia is experiencing a notable housing boom. Stan observes that despite tightening lending terms and reduced government subsidies on mortgages, the substantial military salaries are compensating for the shortfall, enabling a surge in property purchases.

Dina Temple-Raston explains, “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” (04:13).

Stan elaborates on the impact, noting that military recruits have become prime clients for realtors:
Stan: “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” (05:04).

This influx of military personnel, attracted by lucrative salaries—$20,000 for enrollment and $2,000 monthly—has transformed rural areas into economic hotspots. The average Russian wage stands at approximately $800 per month, making these military salaries highly enticing.

Military Recruitment as an Economic Driver

The Russian government's aggressive recruitment campaigns are not only bolstering the military but also inadvertently fueling economic activity. Military billboards proliferate across the country, advertising the financial benefits of enlistment.

Unnamed Interviewee: “You see a lot of ads for who they want. Military, military, they. They're trying to attract new recruits, 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” (02:07).

Stan highlights that this trend extends beyond the countryside to major cities like St. Petersburg, enhancing the real estate market by providing a steady stream of buyers.

Deathonomics: The Cost of War

One of the most alarming revelations in the episode is the concept of "deathonomics," where the Russian government compensates the families of deceased soldiers with substantial survivor benefits. Alexandra Prokopenko, a researcher at the Carnegie Russian Eurasia Center, explains:

Alexandra Prokopenko: “Most of them are actually dead. So people just selling lives of their loved ones, of their relatives for money” (08:36).

These payments, estimated to total around $30 billion, have injected significant capital into the Russian economy. Widows and families of fallen soldiers are purchasing real estate that they might never have afforded otherwise, further stimulating the housing market.

Economic Challenges and Inflation

Despite the housing boom, the Russian economy faces severe inflation and a declining ruble. Food prices have surged, with bread up by 12%, apples by 14%, and milk by 15% over the past year. The ruble has plummeted to 114 against the US dollar, though it has recently stabilized slightly.

Unnamed Analyst: “Food staples have become especially expensive. Bread, up 12% over the last year. Apples, up 14%. Milk, up 15%. Cabbage” (06:12).

President Putin has allocated $126 billion for national defense in the 2025 budget, accounting for nearly a third of government spending, which analysts believe is overheating the economy.

Dina Temple-Raston: “With inflation accelerating, analysts say the Russian economy is overheated” (06:51).

Future Outlook and Predictions

Looking ahead, Stan expresses skepticism about the sustainability of Russia's current economic trajectory. He anticipates worsening economic conditions as funds continue to be diverted to the war effort at the expense of essential sectors like healthcare and infrastructure.

Stan: “I think that Russian economy will fall down because all the money is spent to the war and all the other areas like healthcare” (11:26).

The episode concludes with a somber reflection on the human cost of these economic policies, emphasizing the long-term instability and ethical dilemmas faced by Russian society.

Notable Quotes

• Stan: “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” (05:04).

• Alexandra Prokopenko: “Most of them are actually dead. So people just selling lives of their loved ones, of their relatives for money” (08:36).

• Stan: “I think that Russian economy will fall down because all the money is spent to the war and all the other areas like healthcare” (11:26).

• Unnamed Interviewee: “You see a lot of ads for who they want. Military, military, they. They're trying to attract new recruits, but they pay like $20,000 for enrollment and also like $2,000 per month” (02:07).

Conclusion

The "Mic Drop" episode of Click Here provides a compelling exploration of how Russia's economy is paradoxically experiencing growth in certain sectors despite the turmoil of war and sanctions. Through firsthand accounts and expert insights, the episode uncovers the complex interplay between military recruitment, economic incentives, and the devastating human cost, painting a nuanced picture of Russia's current state as it navigates the third year of conflict.

For more detailed discussions and in-depth analyses, listen to the full episode of "Mic Drop: Russia’s Unexpected Wartime Real Estate Boom" on the Click Here podcast platform.