Overview of IZHS Mortgage Activity in Russia
By the end of 2022, loans for individual housing construction (IZHS) represented roughly 1.3% of Russia’s total mortgage portfolio. This figure is based on data from the Domklik service, as cited by Kommersant. Mortgage penetration into the IZHS segment remained low, accounting for about 6.3% of all housing transactions and roughly 57.2 million square meters of housing constructed in 2022. In that year, mortgage-backed financing supported around 3.6 million square meters of IZHS construction, compared with about 1.1 million square meters in 2021, according to the same publication.
Market observers note a persistent demand for IZHS mortgages, though demand is still highly sensitive to loan terms. The cost of the loan reflects default risk, which makes government subsidies a draw for potential buyers. Moreover, for individuals building on their own, price increases can be substantial, with estimates suggesting a rise of at least 40% in some scenarios.
Analysts also highlighted that extending subsidized, government-supported mortgages could positively affect the IZHS segment. However, growth would hinge on the broader macroeconomic situation. If key economic indicators do not deteriorate, a modest uptick in activity might be observed through the end of 2023.
In mid-December, Kommersant, citing Rosstat data, reported a decline in the commissioning volume of IZHS projects to 1.76 million square meters in November 2022. Earlier, February 2022 saw commissioning at about 7 million square meters, with a downward trend continuing throughout the year.
These patterns illustrate a sector where demand exists but is tempered by price dynamics, subsidy availability, and overall economic health. Stakeholders continue to monitor policy changes and financing conditions that could alter the pace of IZHS construction in the near term. Observers emphasize that subsidies can unlock opportunities for households seeking self-built homes, while financing costs must remain manageable to sustain growth in this niche market.