Russia Eyes Scaling Back Bulk Mortgage Programs and Shifting to Targeted Support
Bulk preferential mortgage programs in Russia are expected to be scaled down as part of a broader recalibration of housing finance. This stance was articulated by Elvira Nabiullina, Governor of the Bank of Russia, following a recent regulatory meeting. Nabiullina emphasized a transition away from broad, sweeping mortgage incentives toward more targeted lending initiatives, especially those that strengthen the secondary housing market.
The governor noted that these broad mortgage programs should serve as a temporary crisis-era tool rather than a permanent feature of the market. In her view, the focus should shift to precise, value-driven programs that directly support responsible home ownership while curbing excessive risk in the system.
She pointed out that late last year housing prices had risen partly due to the extensive reach of developers’ preferential lending schemes. This dynamic was linked to the proliferation of incentives across the market, which can distort price signals and market discipline over time.
On June 4, Irina Radchenko, President of the International Mortgage and Real Estate Academy, commented on the ruble’s depreciation and how it influenced the record levels of mortgage loans issued in Russia during May. The currency decline added strain to borrowers and service costs, underscoring the need for sustainable lending practices that maintain market stability.
Earlier reports in Izvestiya, citing a letter from Etazhi, a federal company, discussed options offered to the regulator to reduce mortgage refusals and streamline lending. The proposed measures included adjustments to the issuance plan and a focus on smaller loan products, such as those up to 2 million rubles, to improve access while keeping risk in check.