There is a notable downturn in mortgage demand in Russia, tied to stricter lending conditions that lower loan amounts and raise required down payments. The cost per square meter has nearly doubled, and interest in buying real estate has dropped, according to Irina Radchenko, vice president of the International Mortgage and Real Estate Academy. Buying an apartment as an investment or to rent later has become less attractive, because the payoff would occur only after many years, a Speech expert with NSN noted.
Radchenko stated that many buyers should anticipate repairs and cautioned that these homes may not appreciate significantly in value. Renting can also be unprofitable, as a four percent rental yield offers little incentive. A buyer might be fortunate to avoid losses only after as long as 16 years, she added. Keeping money in a deposit is increasingly seen as risky due to potential devaluation and inflation eroding purchasing power.
The expert emphasized that acquiring an apartment may still make sense when the goal is to improve living space for a growing family, rather than for investment purposes.
The tighter mortgage standards are linked to a broader strategy to cool the market. In Moscow, the Moscow region, St. Petersburg, and the Leningrad region, loan sizes were trimmed from 12 million rubles to 6 million rubles, while down payments rose from 20 percent to 30 percent. Banks also tightened borrower requirements, further reducing affordability for many would-be buyers.
It should be noted that Deputy Prime Minister Marat Khusnullin proposed that by April the government would present mortgage development proposals. The demand for privileged mortgages remains concentrated in Moscow, St. Petersburg, and the Krasnodar Territory; these three areas were the most affected by the state program’s tightening.
Analysts note three common reasons a bank might reject a mortgage application, reflecting a pattern observed across the market. The discussion reflects a shift in housing finance dynamics and highlights ongoing concerns about affordability and future property value trajectories. (Source attribution: NSN, Speech expert)