Russian Deputy Prime Minister Marat Khusnullin indicated that officials are reviewing options to raise the down payment requirements for family and concessional mortgage programs. He spoke at a press briefing, noting that existing preferential schemes will remain in place through June next year while authorities assess tightening the upfront payment. He also stressed that the mortgage market remains highly active and that regulators are considering how to manage loan volumes ahead of the June deadline. In public remarks disseminated by state media, the government signaled a careful balancing act between preserving homeownership access and ensuring financial stability.
The Deputy Prime Minister projected a total mortgage portfolio for the year that would surpass 3.5 trillion rubles, up from 2 trillion rubles in 2022. This forecast highlights the administration’s effort to keep lending robust while maintaining market stability as housing demand stays strong.
Earlier, the down payment for concessional mortgages rose from 15 percent to 20 percent of housing costs. The Central Bank of Russia recommended gradually aligning concessional mortgage rates with market levels to narrow the gap between prices in primary and secondary housing markets, as reported by state media at the end of November.
Reasons behind higher price signals
Khusnullin explained that the rise in prices for new apartments and the spread between price per square meter in primary and secondary markets can be attributed to several factors. He argued that older housing should not be priced the same as new construction due to shifts in costs and the objectives of mortgage programs. Construction costs have risen for legitimate reasons, and the state supports housing buyers with mortgage benefits as part of broader policy measures.
The deputy prime minister noted that factors such as exchange rate movements, higher labor costs, more expensive building materials, and rising energy expenses contribute to higher prices for new homes. He pointed out that the cost of financial services is reflected in the price per square meter and stressed that the overall price of a new building includes investments in local infrastructure surrounding the development.
Demand expectations for new builds
Nikita Stasishin, the deputy head of the Ministry of Construction, Housing and Utilities, suggested that demand for new buildings is likely to ease by late autumn. He indicated that subsidies for loan interest could help developers weather a downturn in the market.
Stasishin added that over the next six months demand in the primary market may soften due to upcoming policy decisions, with the effective rate for project financing estimated at around 9 to 10 percent. He did not specify what those forthcoming decisions would be.
According to him, subsidies are essential to prevent developers from facing bankruptcy during a demand slump. He also warned that securing funds to relocate emergency housing, if needed, could become challenging and advocated leveraging infrastructure linkages and broad regional development to support these efforts.
What counts as a preferential mortgage
Since 2018, several state-backed mortgage programs have operated in Russia, targeting housing under construction or ready housing from developers. Programs cover families, the Far East region, rural areas, military personnel, and IT professionals. In some regions, special support schemes exist for public sector workers such as doctors and teachers.
The concessional mortgage programs date back to 2020, when housing demand slumped during the COVID-19 pandemic and developers faced financial stress. In response, the president directed a special preferential mortgage program to bolster both citizens and construction firms.
Initially, eligible buyers obtained mortgage loans around 6.5 percent per year for apartments in new buildings, with several adjustments over time that pushed the rate to roughly 8 percent.