Russia tightens ultra-low-rate mortgage rules for loans issued after mid-March 2023
The Central Bank of Russia has announced a set of measures aimed at curbing the use of extremely inexpensive mortgage loans issued after March 15, 2023. The official statement appears on the regulator’s website and outlines a plan to tighten lending practices for these low-cost products.
The Bank explains that it discourages mortgage agreements whose total cost is significantly below prevailing market levels. As part of this policy, banks will be required to book additional loss provisions starting May 30, 2023 for new loans that fall under this category. These provisions are intended to strengthen the financial resilience of lenders and ensure that pricing reflects actual risk rather than subsidized terms.
In the broader housing market, renewed interest in new-build properties has emerged this year. Demand for newly constructed homes rose in January through March, showing a notable increase relative to the preceding quarter. This uptick accompanies a concurrent rise in supply, with new housing stock expanding markedly over the past year. Market observers interpret this dynamic as a reaction to policy stimulus and evolving financing conditions that influence buyer decisions.
Commenting on the trend, Dmitry Alekseev, who leads primary real estate at Avito Nedvizhimost, attributed the stronger demand for new developments to the continuation of preferential mortgage programs. Even as rates edged higher, developers continued to subsidize portions of the cost to keep purchases attractive, helping to sustain buyer activity in the first quarter. The interplay between government-backed incentives and developer concessions appears to be a key driver behind recent market momentum, with buyers weighing longer-term savings against current financing costs. [citation: regulator]