The president of Sberbank, German Gref, stated that following the termination of the state-backed concessional mortgage program on July 1, the Russian housing market will endure several years of adjustment before balance is restored. His remarks were relayed by the bank’s press service.
Gref indicated that the consequences of ending the program will be noticeable, though not catastrophic. He emphasized that Sberbank supports targeted government measures to ease housing access rather than broad, blanket subsidies.
He also noted that the program should have been certified sooner, arguing that delaying its exit created a significant imbalance in the market.
According to Gref, affordability has declined by roughly 10 percent due to the delays surrounding the preferential mortgage program, and the end consumer in Russia is feeling the impact. He pointed out that households now face higher effective costs when seeking new housing, and the broader economy bears the strain as demand cools and project timelines shift.
Gref described the preferential mortgage as a measure that was appropriate during the pandemic year of 2020 but has since outlived its usefulness and become ineffective at the frontier of modern lending. He warned that continuing such subsidies could distort pricing and distort incentives in ways that ultimately do more harm than good.
In a comparative analogy, Gref likened the program to an addiction to stimulants for the body. He described a scenario in which an athlete uses stimulants to achieve short-term performance, only to confront long-term health consequences requiring expert treatment. He suggested that similar dynamics can emerge in mortgage markets when easy credit is pursued without structural reforms.
It is worth recalling that the 8 percent housing loan program for new-builds in Russia ended on July 1. Initiated to support construction activity and household access to housing during the pandemic, its intended effect was temporary. The program saw extensions by the government on four occasions, delaying the market’s adjustment timetable.
During the life of the “State Support” initiative, Sberbank reported issuing more than 880,000 loans to customers, totaling about 3 trillion rubles. The bank highlighted the scale of the program and its role in sustaining activity in the staged economy during a period of extraordinary disruption, while also acknowledging the need for a responsible normalization process as conditions change.