To date, the theory of housing market cycles is not well developed. Clearly, even in general case the development of the models for cycle analysis involves numerous interrelated and unresolved theoretical problems. As for Russia, we face a lot of additional problems – lack of reliable data, existence of calculus in two types of currency for real estate market, high influence of government decisions and regulations on supply and demand. Anyway, residential property cycles exist in Russia cities and could be detected and investigated by various methods.

For large cities of Russia (Moscow and St.Petersburg) extensive data for housing market have been accumulated and processed. In this paper, we explore the following data: asking prices for apartments since 2000 year, sales volumes, number of apartments on display at the market, share of mortgage in sales, information about starts of new construction, etc. Using a panel of 15 year, we examine the formation of housing market cycles, behavior in inflection point, their amplitude and period.

The paper contributes to our understanding of housing market cycles in Moscow and St.Petersburg in two ways. First, we found high influence of real macroeconomic variables on market. The analysis suggests that results from the housing market should be evaluated in the context of the overall economy’s performance. Second, we discover the existence of short-term cycles in price dynamic, inherent to own real estate market. The period of cycles is about 27 months in 2000-2009 and up to 40 months in 2009-2014. Presumably, unusual turnaround took place in the residential market during 2008-2009 years crisis. It would be noted the nature of the impact of fundamentals on residential market changed in 2008/2009 too.

Will be considered separately hypothesis about the formation of the 18-year cycle, where shot-term cycles are the part of general 18-year process.