Russia considers a social credit program over concessional mortgages, a shift seen as benefiting developers more than residents, with 30 million square meters of new housing at stake. The debate centers on how a social loan program would differ from existing concessional mortgages, and whether continuing large-scale housing construction makes sense when significant portions of new projects are already underperforming in sales and occupancy.
The emerging social credit concept appears vague on purpose, with discussions focusing on better targeting rather than universal access. In practical terms, this means relief would not be extended to everyone, since unlimited resources simply aren’t feasible. Yet housing policy relies on broad demand to drive construction. Officials emphasize that subsidy programs must serve the public interest, though precise definitions remain elusive. The economy has long relied on construction as a locomotive, suggesting substantial alignment between state aims and developer interests. After a recent rise in borrowing costs, when the government began subsidizing bank rates more aggressively, there is concern that the shared path may become less harmonious. The question remains whether the projected 30 million square meters can be delivered if demand falters and costs rise.
Where would these hypothetical meters be located? In August, media reported that as much as 60 percent of newly built homes remained unsold, with certain regions seeing 75 percent. Has the market found a solution since then? Are new apartments selling at the expected pace? Mortgage volumes appear buoyant mainly against the backdrop of the unusually poor performance seen in 2022. Some buyers rushed to secure loans when rates moved, while others faced tighter requirements and higher down payments. Analysts estimate that even under optimistic scenarios, three to five years may pass before all surplus housing assets are absorbed. In short, the problem persists rather than disappearing.
The construction sector’s role in the economy has raised questions about its momentum. A sense persists that large-scale development continues, even as some speak of a slowdown. The landscape features sprawling neighborhoods, soaring high-rises, and land preserved for future projects. Yet quality remains a concern. Khrushchev-era buildings are frequently criticized for cramped layouts and questionable durability, with some structures described as fragile or poorly insulated. The allure of small studios—often 12 to 15 meters—produces cramped environments with limited sound isolation, where the proximity to neighbors can become an everyday reality. In some cases, these developments were intended to accommodate social programs for orphans, disabled residents, or large families, but execution has fallen short, and the pace of renewal has stalled. Many of the older stock is treated as temporary housing, awaiting a long-term solution, which complicates the status of current utilization.
Personal experiences add a human dimension to the discussion. A resident searching for a new apartment in Peterhof encountered signs of structural issues in a recently built area. Cracks appeared in walls as the building settled, and later repairs were funded by state-supported measures after a contractor’s bankruptcy. The episode underscored broader concerns about building quality and ongoing maintenance. Similar reports have circulated about new housing in St. Petersburg, where some developments reportedly feature leaks, inadequate ventilation, and other defects. Such stories contribute to reservations about investing in new apartments, particularly for students, migrants, or families seeking affordable housing.
Between rising costs, stricter lending standards, and mixed sales performance, the appetite for mass purchases of real estate remains uncertain. Developers continue to expand volumes, while the state refrains from issuing clear directives to curb activity. The path forward remains murky, and observers question whether renovation and reinforcement of the existing stock might eventually supersede new construction as a more sustainable approach. In the meantime, the housing market shows a relentless pace of activity, with new towers rising and land being repurposed, even as concerns about durability and livability persist across the country.
This analysis reflects a perspective shaped by industry experience and market signals, acknowledging that interpretations may differ among policymakers, developers, and residents. It remains an ongoing discussion about housing policy, fiscal support, and long-term urban development in Russia.