Housing prices in Russia are anticipated to drop after the phased end of privileged mortgages, set to conclude on July 1. This perspective comes from Anatoly Aksakov, who chairs the State Duma Financial Market Committee, and was shared in a recent interview. The anticipated shift reflects a broader rebalancing of demand as the subsidy program expires and buyers adjust to ordinary lending terms.
The main expectation is that once concessional mortgage support ends, demand for these favored loans will shrink markedly, allowing property prices to move toward more typical market levels. Analysts note that the housing market already showed signs of softness as lending standards tightened under higher oversight from the Central Bank. With the subsidy removed, buyers face a return to standard borrowing costs, which could temper competition for available housing stock and lead to price corrections across segments.
Aksakov warned that currently nearly all mortgage lending is bound to some form of benefit. This concentration can distort market dynamics and, in some cases, invite misuse when households take on multiple subsidized loans. Such behavior strains the alignment between supply, demand, and fair pricing, underscoring the need for prudent risk controls and a clear path toward market-based pricing once subsidies expire.
For prices to settle where the market would expect under free competition, the majority of borrowers must face market-based interest rates rather than subsidy-driven terms. This shift would restore alignment between borrowing costs and housing values, enabling prices to reflect genuine supply and demand conditions rather than policy-driven distortions.
The parliamentarian added that targeted aid will continue for large families, active service members, and residents of repressed regions. Aksakov also noted that a substantial share of concessional mortgages has clustered in Moscow and the Moscow region, highlighting regional disparities that could influence price movements as subsidies fade.
Earlier discussions in the State Duma emphasized alternative housing strategies. Proposals included expanding cooperative housing models and promoting rental housing development as components of a more resilient housing system, rather than relying primarily on concessional mortgages. The goal is to diversify housing options while maintaining social support where it is most needed.
Market participants have observed a notable drop in demand for mortgage financing in the country, which aligns with expectations for a softer near-term price trajectory. In the wake of subsidy reductions, buyers, lenders, and policymakers are adjusting strategies to navigate the new funding landscape, balancing affordability with sustainable demand for housing across regions.