Home building: Russians have almost stopped building housing with a mortgage
Russians have almost stopped mortgaging houses. The number of loans issued in July for individual housing construction fell fivefold compared to last year. The reason is the abolition of mass preferential mortgages at 7% and stricter rules for building houses. Starting this year, this can only be done with the involvement of accredited developers. At the same time, due to falling demand, the cost of building materials is decreasing, despite high annual inflation. When individual housing becomes more affordable — in the material of Izvestia.
How much have mortgages for private homes dropped?
Mortgage loans for individual housing construction (IHS) dropped to 12 thousand loans in June, which is 4.7 times less than last year. Then they were issued almost 60 thousand times, follows from the data of the Central Bank, which was studied by Izvestia. The volume of disbursements over the same period decreased by more than three times, to 47 billion rubles.
A mortgage can be taken on both a finished house and one under construction. Demand for housing loans for the latter purpose fell the most — issuance decreased fivefold to 6 thousand loans, according to the Central Bank. Housing loans for the purchase of ready-made houses have only halved, which indicates a more stable demand in this segment.
Market players confirm a decrease in the volume of mortgages for residential housing compared to 2024, as reported by representatives of Sberbank's Domclick, VTB and Sovcombank services. They also noted that government programs, in particular, family mortgages, remain the driver of the market. The drop in rents is largely due to changes in the conditions of state support for the housing market.
In the second quarter of 2024, 60% of residential housing loans were issued under the 7% preferential mortgage program, which was available to all Russians, said Anna Zemlyanova, chief analyst at Sovcombank. Its completion since July last year has greatly reduced the volume of disbursements.
In addition, the conditions for a family mortgage have also tightened — it was forbidden to apply to borrowers without children under the age of six (before that, the threshold was at the age of 18). However, the program still remains widespread — according to Izvestia estimates, it accounts for 80% of all housing loans.
Basic mortgage programs are currently unavailable to the public due to too high rates, said Vitaliy Kostyukevich, Director of Absolut Bank's Retail Products department. Izvestia sent a request to the Central Bank of the Russian Federation about the reasons for the drop in demand.
In addition, since March 1, 2025, escrow accounts have been used to apply for mortgages on residential housing, said Regina Dydalina, executive director of the federal company Floors. Initially, this mechanism was introduced to protect citizens' money. The same system has long existed for apartment buildings.
However, this change turned out to have negative sides. In the case of residential housing, the borrower could previously get a loan and manage the funds himself, hiring contractors or building a house on his own, said Vladimir Chernov, analyst at Freedom Finance Global. With the introduction of mandatory escrow accounts, the money is locked in the bank until the construction is completed. Moreover, it is no longer possible to build a house yourself — only an accredited developer can do this. Because of this, the borrower loses flexibility and actually finds himself tied to the developer, rather than to his own project.
"Private developers in the residential housing segment turned out to be financially unprepared for the abrupt transition to escrow accounts, and a series of unfinished projects began, which also affected the volume of new construction and lending," added Regina Dydalina.
In residential housing, people are more dependent on the cost and quality of materials and on the developer, because such construction is poorly standardized, concluded economist Andrei Barkhota. Escrow accounts streamline the process for banks only and protect borrowers. At the same time, the measures create more risks and uncertainty for developers, and partly add inconvenience to citizens, which is why lending to residential housing slows down.
How the drop in withdrawals affected prices
There is a decrease in prices in the market of building materials for residential housing due to low activity of buyers, said Regina Dydalina from Floors. The cost of accredited companies' services has barely changed, despite high inflation and a shortage in the labor market, which means companies have to pay more and more workers to keep them.
The services of contractors who organize the work of builders have increased slightly in price, but they are ready to give significant discounts on their services, the expert added.
Prices for residential housing-related goods and services are declining just against the background of a slowdown in demand from borrowers, said Vladimir Chernov from Freedom Finance Global. Nevertheless, this trend should stop over time.
Changes in the market have killed the main advantage of residential housing — individuality and savings due to independent cost control, the expert noted. Unlike an apartment, a family home is most often a personal project, where it is important to choose the contractors, materials and speed of construction yourself. After customers are required to contact only accredited developers, borrowers either postpone their plans or try to buy housing without a mortgage, Vladimir Chernov explained.
What will happen to the residential housing market by the end of the year
Residential housing is a promising market segment, Anna Zemlyanova from Sovcombank is sure. According to a survey conducted by VTsIOM and Dom.Russia", 53% of Russians who live in an apartment building would like to move to a private one, which is about 18.5 million families. Of these, 4.4 million households dream of building their own home and are ready to consider a mortgage.
Nevertheless, residential housing occupies a small part of the market, and not all lenders are working in this direction, added Vitaly Kostyukevich from Absolut Bank. The reason is high risks: it is difficult to assess such facilities, control costs and construction. In addition, the cost of collateral in the case of private houses is lower than the cost of an apartment in areas with developed infrastructure.
— However, in some regions, private houses make up a significant part of the housing stock, for example, in the Krasnodar Territory. Residential housing will be an important area there," said Vitaly Kostyukevich.
In the near future, the share of residential housing in loans will not grow much, since an affordable mortgage is needed to build a house, the expert concluded. However, as market rates decrease, lending will recover, and this trend will also affect the private construction segment.
Demand for residential housing is already gradually recovering, the Floors company noted. In previous months, due to the increased cost of materials, many saved money on profitable deposits in order to wait for the best moment for construction. Now that building materials have fallen in price amid low demand, Russians can revisit the idea of building their own homes. However, in order to stimulate the segment, it is important to expand the list of accredited companies that will be ready to help citizens in the implementation of their plans, Andrei Barkhota concluded.
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