Mortgage lending for finished and under-construction flats in Russia is facing tougher scrutiny, according to industry conversations reported by Izvestia with insights from the company Etazhi. Banks are tightening the criteria, and the trend is altering the landscape for homebuyers across the country. In recent months, lenders have become more selective, with approval rates slipping as credit officers push for stronger indicators of repayment capacity. This shift is not just a general mood change; it reflects concrete changes in how banks assess risk and the standards they apply to mortgage applications.
Data from early 2024 show a clear decline in approvals. After a year in which many banks posted average approval rates around 80 to 82 percent, the start of the year brought a sharp drop. In January and February, the overall approval rate hovered near 73 percent. The decline was most pronounced among banks with the largest share of mortgage originations, suggesting a sector-wide recalibration that hit the largest lenders hardest. These figures come from Etazhi and were reported by Izvestia, underscoring a systemic tightening rather than a temporary dip.
Analysts estimate that the top 15 banks in Russia now approve roughly 59 percent of applications for primary housing purchases and about 55.4 percent for finished housing. The numbers illustrate a market-wide shift away from easy credit toward more rigorous scrutiny that affects both new construction deals and ready-to-ment properties alike. The figures help explain why many prospective buyers are hearing longer processing times and more documentation requests during the loan-application process.
The tightening reflects a broader shift in lender risk management. Banks are not only weighing the borrower’s current debt load, but also the potential for higher future obligations. The expansion of risk metrics includes a careful look at whether applicants have any credit lines that were opened and used in the past, even if those accounts have not been active recently. In practice, this means banks may consider a wider set of indicators when evaluating a borrower’s overall credit profile, sometimes in ways that significantly affect approval decisions for mid- to high-value mortgages.
Industry sources caution that this trend may continue in the near term. Given the ongoing demand pressures in the housing market and the need for prudent lending, some observers project that overall mortgage approval rates could fall further, potentially dipping below the 50 percent threshold if current risk controls persist. Such a development would have implications for buyer timelines, project financing, and the pace of new housing construction in major cities and regional markets alike.
In the context of market overheating concerns, analysts have emphasized the interplay between supply, demand, and credit conditions. A more selective lending stance could slow speculative activity while preserving financial stability. For buyers and agents navigating these conditions, it becomes essential to prepare comprehensive documentation, demonstrate robust debt servicing capacity, and consider how evolving credit metrics may affect loan terms and eligibility. While the market remains competitive, prudent borrowers who align with lenders’ updated criteria may still secure favorable terms with well-structured applications.
Industry professionals note that rental pricing dynamics could be influenced by the same macro conditions shaping mortgage approval. As lending criteria tighten, the balance between renting and owning, along with vacancy rates and yield expectations, will likely respond to the evolving financial environment. Stakeholders—developers, brokers, and buyers—are watching closely for policy signals and lender guidance that could affect price movements and financing options across the housing sector. (Izvestia, with input from Etazhi)