Housing affordability stands as a key socio-economic indicator. It reflects both real and expected household income, forming a cornerstone of mortgage policy. It also mirrors labor migration trends, with people moving away from declining areas to places offering work and education. The construction sector, in turn, remains pivotal to the national economy, as residential building sustains demand across the supply chain, from building mixtures to paints and finishes.
In 2022, Russia achieved a record in housing commissioning, reaching 102.7 million square meters. This marked an all-time high in the country’s history.
Looking ahead, the average maturity of housing loans from 2018 to 2023 rose by nine years, reaching 24 years. For Moscow, the average mortgage for new buildings stood at 8.4 million rubles, while secondary housing averaged 6.7 million rubles.
Turning to the structure of new construction, Rosstat data show a strong emphasis on individual housing construction, with 56% of homes built in 2022 under this category. The year also saw population-led deployments grow by 16.5%, while developer-led projects rose by 4.6%. Approximately 50 million square meters were planted by investors, including about 13 million in Moscow, 3.5 million in St. Petersburg, 5.7 million in the Krasnodar Territory, and 3 million in Tatarstan. This highlights a clear concentration of development in economically developed regions, with Moscow, Saint Petersburg, the Krasnodar region, and the capital’s surroundings accounting for roughly half of all residential investments. In Moscow, the higher income levels and longer mortgage terms point to a tendency to stretch payments to a more manageable level, yet this also signals potential limits on active demand in the future.
What can make housing more affordable? Currently, reducing construction costs is not readily achievable. The most budget-conscious project in the history of the industry was the Khrushchev era, which produced 290 million square meters of housing between 1959 and 1985. While the scale was impressive, quality and pace differed markedly from modern housing construction. In this light, the second half of new buildings, particularly those raised through individual housing construction, becomes especially interesting when comparing with large-scale development projects led by developers.
Initial advantages of individual housing construction include a more uniform distribution of activity across regions. While leaders such as Moscow and the Leningrad region, along with the Krasnodar Territory, remain prominent, about a million square meters of annual construction come from residents in areas like Nizhny Novgorod, Samara, and Chelyabinsk. The top twenty regions also feature the Stavropol and Perm Territories, as well as Irkutsk and Orenburg, as noteworthy contributors.
Secondly, a country house, despite its amenities, generally costs less for a family. The Rural Mortgage program data show average loan sizes around 2.3 million rubles. A plot with a garden often proves cheaper than a one-bedroom apartment in many locations. More importantly, such housing tends to support multi-generational living and demographic stability, creating a durable social fabric.
Moreover, statistics counter the stereotype that young people shun rural living. Rosreestr data indicate an 86% rise in total land transactions since the introduction of preferential rural mortgages. Around 300,000 houses have been constructed and put into operation, the highest figure since 2015. About 75% of lenders in this segment are households headed by couples under 40 years old.
Is there potential to grow individual housing construction further? Yes, with coordinated socio-economic policies. Expanding construction under approved projects, for instance, makes a home built by a qualified contractor more readily accepted as collateral, which helps banks refine risk management. More than 500 approved projects are published on a platform developed by DOM.RF experts. A modest scale of government co-financing, such as 1% of the loan cost, could accelerate the broader use of proven projects and bolster regional construction activity.
Looking ahead, it seems unlikely that inexpensive housing will become common in major cities soon. Price declines are not expected. Yet the government can influence access to quality housing by promoting individual housing construction and supporting affordability through targeted policies and programs.
Note: The above content represents a perspective on housing trends and policy options and may not align with every editorial stance.
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