Mortgage issuance in Russia will fall to record lows in 2025

In early 2025, mortgage issuance in Russia will drop sharply by 30-40%, predicted in the federal wall materials combine "Winzer".

"Large banks continue to reduce the availability of mortgage loans. Some of them announced another increase in the minimum down payment on market programs from 15-20% to 50.1% of the value of the purchased property. Plus limited issuance of mortgages on special terms on a simplified scheme or with a discount - said the director of the federal plant wall materials "Winzer" Denis Zhalnin. - Including banks are beginning to refuse to issue trench mortgage, which has become popular in recent years, fearing that it may run counter to the coming into force mortgage standard".

According to the expert, mortgage approvals and originations could fall to record lows in January because of the mortgage borrower protection standard that will go into effect at the beginning of the year.

"Banks have already begun to re-insure themselves and are cutting back on approvals for mortgages that may become at risk on January 1, 2025. The market will have to transform itself under the new conditions and monitor the regulator's reaction to new schemes to stimulate demand. This will lead to a significant reduction in mortgage originations at the beginning of the year. The main driver for the market will remain family mortgage, if it will not be radical changes in terms of issuance and requirements for borrowers, "- continues Zhalnin.

The expert noted that it is unlikely to expect an increase in the availability of mortgage loans in the coming year. This is due to both the high key rate and the measures taken by the Central Bank to curb inflation.

"The level of mortgage issuance in January will drop sharply by 30-40%, the situation may worsen with a significant increase in the key rate at the next meeting of the Central Bank in December. Then the market will actually be left with only two options to improve housing conditions - family mortgage and cash purchase", - predicted Denis Zhalnin.

Already now, according to the federal company "Etazhi", the share of transactions with mortgage in Russia has fallen to record levels, for all types of real estate dropped to 39%, including in the secondary real estate segment to 28%, in the country market - to 32%, in new buildings - to 62%.

"The last time such a significant reduction in the share of mortgage transactions in the Russian real estate market was noted against the background of barrier rates in May 2022. Then in the secondary market it was 30%, in the countryside - 20.9%, for all types of real estate - 39.2.%, and in the primary market was higher than now because of the action of preferential programs - 72.1%", - explained the Deputy head of the mortgage Department of the federal company "Etazhi" Tatiana Reshetnikova.

Earlier, October 29, it was reported that the issuance of mortgages at the end of 2024 will decline by more than a third. This follows from the forecast "Dom.RF". On preferential programs the fall will be slightly less - 26%. In 2025, a more significant decline is predicted - twice as much as in 2023.