Russia’s Central Bank signals no need to extend preferential mortgage for new homes

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The Central Bank of Russia has indicated there is no current necessity to preserve the existing preferential mortgage program for new housing. This stance was shared during a press briefing by Ksenia Yudaeva, First Deputy Governor of the Central Bank, alongside Alexander Danilov, the Director of the Department of Banking Regulation and Analytics. The information was reported by RIA Novosti, a major news agency. In their remarks, the officials underscored that the program had served as a precautionary measure during financial stress, but with conditions now stabilizing, keeping it unchanged is not considered essential.

Yudaeva explained that the mortgage scheme performed its role as a safety valve during uncertain times, and in the present environment there is little justification for continuing it in its current form. The central bank believes that maintaining the same terms could contribute to imbalances in the wider real estate market. These concerns center on distortions in supply and demand that may emerge if incentives remain heavily skewed toward new builds, potentially crowding out other affordable housing options and delaying necessary adjustments in the market equilibrium.

Danilov added that once the grace period associated with loans for new apartment purchases concludes, demand is likely to shift toward alternative offerings within the housing sector. He suggested that buyers would naturally reallocate their interest across a broader spectrum of products, including older housing stock, competitive price segments, and other financial instruments designed to facilitate home ownership. This realignment is expected to help restore balance across developers and lenders while encouraging a more resilient market response to evolving affordability dynamics.

In the latter part of November, authorities at the Ministry of Finance of Russia were reportedly preparing statements regarding the potential non-extension of the current preferential mortgage program, which had stood at a 7 percent annual rate. If the program does not continue, it will mark the end of a policy episode that targeted new-build purchases, with implications for both borrowers and construction activity. The decision hinges on broader macroeconomic considerations, including inflation control, credit risk management, and the pace of housing supply growth, all of which factor into the state’s broader housing strategy moving forward.

Earlier, the Central Bank’s press service noted plans for a housing savings framework to emerge in the coming years. This system is envisioned as a mechanism to assist citizens in accumulating funds for a down payment on a mortgage. The proposed model would complement existing lending options, offering savers a structured path to securing financing for home purchases. As the housing market evolves, such savings programs are expected to play a crucial role in improving accessibility to mortgage finance, reducing upfront costs for buyers, and fostering long-term stability in home ownership. The evolving policy landscape signals a shift toward diversified support tools for households, balancing market efficiency with consumer protection and financial resilience.

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