The Russian mortgage lending landscape is expected to contract notably through the end of 2023, according to Vitaly Mutko, the Director General of DOM.RF. He shared these projections during the Open Dialogue event held in the Federation Council, as reported by TASS. Mutko’s forecast points to a cooling in demand and a slower pace of loan issuance, signaling a significant shift for lenders, borrowers, and construction stakeholders across the country.
Under his assessment, the total number of new mortgage loans could range from 1.1 million to 1.4 million for the year, with a cumulative lending value around 3.9 trillion to 5.0 trillion rubles. This implies a decline of roughly 30% to 45% in loan count and a 35% to 50% drop in overall loan volume compared with 2022. Despite this downturn in new financing activity, Mutko noted that the mortgage portfolio is poised to continue expanding, potentially adding between 1 trillion and 1.5 trillion rubles in value. This suggests a shift from originations to portfolio growth, influenced by factors such as refinancing, slower new build launches, and evolving borrower demand.
Mutko stressed that the expected contraction in new loans does not equate to systemic financial distress. He pointed to a robust safety cushion built from ongoing sales of existing projects, which helps stabilize cash flows for developers. He further explained that the project financing structure, in operation since 2019, serves as a protective mechanism for citizens and mitigates the risk of encountering a surge in “deceived shareholders.” In his view, the framework has reinforced the resilience of the housing market and the broader economy by ensuring that financing channels remain steady even when new construction slows down.
Looking ahead, Mutko warned that a noticeable dip in the commissioning of new buildings could be anticipated in the years 2026 to 2027. This projection reflects underlying dynamics in construction timelines, demand cycles, and the adjustment of supply to evolving market conditions. The emphasis, however, is on a managed transition rather than an abrupt downturn, with the domestic housing finance ecosystem adapting through a combination of price signals, policy measures, and longer-term financing arrangements.
In the wake of these discussions, separate disclosures highlighted how credit approvals and denials evolved in the prior year. There were indications that some Russians faced tighter lending criteria or higher barriers to secure new credit, reflecting cautious underwriting practices and a heightened focus on borrower solvency in a changing macro environment. The broader message persists: housing finance remains an area of close observation as authorities balance growth objectives with financial stability concerns.
Additionally, market observers had previously warned of rising prices in the secondary apartment market, a trend that can influence affordability and borrower behavior. The combination of slower new-build activity, potential shifts in property prices on secondary listings, and the ongoing evolution of credit conditions all contribute to a nuanced outlook for consumers and developers alike. As policymakers and industry leaders assess the trajectory, the conversation centers on how to maintain accessible financing options while safeguarding the housing market from undue volatility.