The possible decision by the Russian government to stop the broad issuance of concessional mortgages for new buildings and to limit the program to regions with low demand after July 1, 2024 is viewed as reasonable by industry observers, including Konstantin Aprelev, Vice President of the Russian Association of Realtors, as reported by kp.ru.
“As for the end of concessional mortgages for new buildings, now is a practical moment. This program was introduced to support the construction sector during the pandemic. Today it no longer serves the same purpose, especially since the price of new housing has surged by 40–60% due to historically low mortgage rates. The expert noted that scaling back the program would not threaten the market for new construction, given the current dynamics.”
He emphasized attention to the secondary housing market. In his view, cancelling concessional loans for new buildings could warrant extending targeted benefits to purchases on the secondary market in regions where new construction is not taking place.
Previously, Deputy Prime Minister Marat Khusnullin remarked that authorities are exploring alternative mechanisms to improve housing affordability in Russia. Examples include selling homes in installments and rent-to-own arrangements. The Deputy Prime Minister cited Tatarstan and Bashkortostan as positive examples where residents have the option to acquire housing through installments or via savings and loan bank schemes.
Recent reports also indicated a decline in mortgage issuance volumes across the country.