In the first half of 2024 the Russian housing market underwent a noticeable shift. Data from KEY CAPITAL, gathered and analyzed by Olga Guseva, the general director, show that buyers moved away from mortgages tied to the secondary market and toward financing for new homes. This shift marks a clear change in consumer preferences and reflects evolving lending conditions as the market adapts to different housing segments within the country. A careful look at the data reveals how lenders and borrowers respond to incentives, credit terms, and the relative appeal of building versus buying used homes.
Guseva explains that mortgages aimed at purchasing housing under construction rose sharply in early 2023 and continued to climb into 2024. The total number of such loans reached 292.2 thousand, representing an increase of about 28 percent year over year. The regional picture mirrors this momentum, with growth near 29 percent in most areas outside Moscow and St. Petersburg. The total funds allocated to financing construction projects expanded by roughly 32 percent, signaling a broader reallocation of credit toward developers and new builds. This trend highlights how the credit landscape is being reshaped to support construction activity and the delivery of new housing stock to meet demand. In this environment, buyers are often drawn to development incentives, including discounted lending terms in construction agreements, which can make the economics of new builds more attractive despite higher upfront costs.
On the other hand, demand for loans to purchase a second home showed a notable decline. The number of such housing loans dropped by about 22 percent compared with the previous year, arriving at 468.6 thousand. Regional declines were even more pronounced, approaching 23 percent. The sharpest reductions in transactions on the secondary market occurred in the North Caucasus and the Siberian Federal Districts, where volumes fell by roughly 69 percent and 60 percent, respectively. The pattern suggests that more buyers are prioritizing new construction, where the combination of favorable program terms and the potential for longer-term price stability makes new homes an appealing option relative to the resale market. This shift also reflects adjustments in consumer confidence and liquidity conditions, as households weigh the cost of financing used properties against the benefits of owning a recently completed residence.
Guseva notes that mortgage rates for second-home purchases have not benefited from state-backed support and have risen into the 18–20 percent range. This increase has squeezed demand in that segment and pushed buyers to consider options in the new-building market. There, joint-participation agreements during construction can offer discounted lending terms and more favorable payment schedules, which contribute to the observed borrowing behavior. The ability to participate in development projects during construction often comes with price protections and more transparent cost structures, appealing to borrowers seeking long-term value and predictable payments. The result is a measurable reallocation of borrowing toward new development rather than the resale market.
Earlier reporting highlighted a surprising uptick in mortgage activity within Moscow, suggesting that the capital continues to play a pivotal role in shaping national market dynamics. Moscow’s influence appears to act as a bellwether for broader trends, with shifts in demand and credit allocation in the city tending to foreshadow movements in other regions. This concentration of activity in the capital is a key indicator of how lenders calibrate terms in response to perceived risk, supply conditions, and the pace of new construction.
Analysts also observe that where housing construction is most active within Moscow reveals broader patterns. The distribution of building activity in the city provides insight into demand cycles, credit allocation, and the pace at which new supply reaches the market relative to existing stock. The evolving landscape shows how lenders adjust to shifts between current stock and fresh development, influencing both borrowers and developers and signaling where future growth may occur. The evolving dynamic underscores the importance of credit policy, construction financing, and regional demand in shaping the trajectory of Russia’s housing market as the year progresses.
Attribution: KEY CAPITAL, socialbites.ca