Recent reporting shows a sharp cooling in the Russian mortgage market at the start of 2024. Mortgage lending contracted dramatically in January, with activity slipping to about a third of December’s volume. This assessment comes from a leading ratings agency that tracks credit trends across the banking system. The shift reflects a combination of tighter lending standards, cautious borrower sentiment, and the broader economic context facing households in Russia.
Specifically, the Ratings Bureau reports that banks issued 61,000 home loans in January, totaling roughly 235.6 billion rubles. By contrast, December figures stood at 178.4 thousand loans and 783.7 billion rubles in value. The month-to-month slowdown underscores a material slowdown in household demand and in banks’ willingness to extend new long-term financing during the first month of the year.
Data from the Central Bank of the Russian Federation adds a longer view to the picture. Mortgage origination in January 2023 reached about 275 billion rubles, which marks a substantial gap versus December 2022, when loan volumes approached 785 billion rubles. The year-over-year comparison indicates that mortgage growth decelerated, slipping from 2.9 percent growth to a modest 0.6 percent within that period. Such movements hint at a broader cycle of normalization following a period of rapid expansion in lending during the pandemic era.
Within the January totals, state-backed programs drove a steep decline. Issuance under preferential mortgage schemes dropped from 280 billion rubles to 58 billion rubles month over month, while family mortgage allocations fell from 284 billion to 102 billion rubles. The non-targeted market mortgage activity experienced a smaller drop, down 35 percent to 86 billion rubles by December 2023, indicating that private-sector lending remained more resilient than subsidized programs during the transition into 2024.
Industry observers have also noted a parallel trend in the rental market. Agents and analysts have reported a notable uptick in asking rents for primary cities, signaling a shift in the affordability landscape even as purchase financing cools. As the cost of owning slows, more households appear to be weighing rental options, which could influence demand dynamics in both urban centers and surrounding suburbs over the coming months.
Looking at the broader housing market, there is a sense that demand for housing is aging. A growing share of buyers appears to be waiting for clearer signals on prices, mortgage rates, and policy support before committing to purchases. That hesitation aligns with a gradual recalibration in buyer expectations and a shift in how households approach home financing—particularly in the wake of fluctuating program incentives and evolving credit criteria. Market participants are watching how banks adjust their risk appetite and how new regulations might alter the balance between demand and supply in key urban regions.
Overall, the January 2024 data illustrate a transition period for the Russian housing finance landscape. While the housing market remains active, the pace of mortgage approvals and the mix of supported versus conventional loans suggest a recalibration rather than a collapse. Analysts caution that quarterly and year-end comparisons will be necessary to determine whether the observed slowdown reflects a temporary seasonal pattern or a durable shift in demand and lending conditions. In any case, the coming months are expected to reveal how borrowers adapt, how lenders recalibrate pricing, and how policy measures may stabilize or further temper activity as the year unfolds, with close attention paid to major metropolitan areas and their evolving rental markets. [citation: Ratings Bureau; Central Bank of the Russian Federation]