Mortgage-2025: The Housing Market Development and the Worth of Buying an Apartment Now
In 2025, Russia's mortgage market is going through turbulence. Despite Bank of Russia reducing interest rates slightly, it hasn't had a significant impact on market rates, with the average mortgage rate remaining high at 25.6%. Despite this, Elvira Nabiullina, Chair of the Bank of Russia, has indicated that a more drastic relaxation wasn't considered due to persistent significant inflationary pressure on the Russian economy. By the end of the summer, the Bank of Russia expects inflation to slow down to 7-8%, which is more than double the target.
Analysts predict that at the July meeting, the Bank of Russia's board of directors will likely continue to ease monetary policy and lower interest rates to 19%, but accessible mortgage loans might not become available until 2026-2027, when interest rates reach at least 13-15%.
High inflation simultaneously erodes purchasing power and keeps interest rates high, making mortgage loans a less attractive financial instrument, creating a "frozen demand" effect: people don't want to or can't take out loans under such conditions.
Artem Minayev, a commercially-focused director at "Group LSR" in the Urals, explains, "With the current interest rates, most Russians simply can't meet bank requirements or aren't willing to take on such a high debt burden. Deals involving market mortgages have almost vanished; instead, family mortgages dominate, accounting for 75% of sales."
Statistics support Minayev's assertion. State programs, especially the family mortgage program with a 6% interest rate, are the only viable channel for most transactions. Since the beginning of the year, more than a thousand deals have been made using the family mortgage program and nearly 27 billion rubles have been loaned. Dom.RF expects that by the end of 2025, Russian banks will issue over 1 million housing loans worth over 2.3-2.6 trillion rubles using the family mortgage program.
Since April, the program has been expanded to include the secondary market—albeit with limitations in smaller cities and apartments less than 20 years old. However, this change does not affect Yekaterinburg.
The potential expansion of the family mortgage program isn't limited to its current scope. Russian President Vladimir Putin has instructed the government to expand the discounted mortgage program for families with children under 14 and for families participating in a special military operation. In addition, Putin has ordered an increase in the limits for the family mortgage program based on family size: the larger the family, the higher the limit.
If the discounted program is made available to all families with children under 14, Alpha-Bank analysts suggest a theoretical potential for over 8.5 million loans, which is over 22.5 times the annual volume for 2024.
While banks are reducing lending, tightening lending criteria, and focusing on existing customers, housing prices aren't decreasing, but neither are they increasing. In Yekaterinburg, the average price of an apartment in a secondary building is 127,000 rubles/sq.m, and for new apartments, it's 164,000 rubles/sq.m. However, Vladimir Chernov, an analyst at Freedom Finance Global, predicts that the planned expansion of the family mortgage program might cause prices to rise by 16-18% in some regions.
АО СПЕЦИАЛИЗИРОВАННЫЙ ЗАСТРОЙЩИК ЛСР. НЕДВИЖИМОСТЬ - УРАЛ. Проектные декларации на сайте наш. дом.рф. Полная стоимость кредита рассчитывается от 6,579 до 7,091%. Ставка от 4% годовых на срок до ввода объекта недвижимости в эксплуатацию доступна в рамках программы ПАО Сбербанк "Ипотека с государственной поддержкой для семей с детьми" при приобретении строящегося жилья у юридического лица по ДДУ или готового жилья у застройщика - партнера Банка: АО "СЗ "ЛСР. Недвижимость - Урал", при нахождении объекта застройщика на проектном финансировании в Корпоративном Блоке Сбербанка и присвоении в связи с этим снижении ставки на 2% годовых. Предложение действительно в период с 10.07.2024 по 31.12.2030 г. вкл. Ипотечное кредитование осуществляется ПАО Сбербанк, генеральная лицензия Банка России на осуществление банковских операций No 1481 от 11.08.2015 г. Подробнее об условиях кредитования в ПАО Сбербанк, необходимых документах, ограничениях уточняйте на сайте www.sberbank.ru. Банк вправе отказать в предоставлении кредита без объяснения причин. Продажи осуществляются по договорам участия в долевом строительстве с использованием счетов эскроу в соответствии с Федеральным законом No 214-ФЗ "Об участии в долевом строительстве многоквартирных домов и иных объектов недвижимости и о внесении изменений в некоторые законодательные акты Российской Федерации". Рассрочку предоставляет АО "СЗ "ЛСР. Недвижимость - Урал". Реклама. АО "Специализированный застройщик "ЛСР.Недвижимость-Урал", www.lsr.ru , erid:F7NfYUJCUneTRUSXcJPV
With no decisions made on expanding the program and its specific conditions still unclear, the market remains in equilibrium; sharp price swings aren't occurring, but housing affordability isn't improving. In such conditions, market strategy depends more on individual financial models than external factors.
For those expecting market mortgages or the expansion of the discounted mortgage program, analysts advise patience and saving a large first interest payment at a high interest rate on a deposit. For those already eligible for the discounted program, this might be a good time, as rates are fixed, and prices aren't increasing. If there's cash on hand, the market favors buyers: sellers are negotiable, competition is low, and there are many discounts available.
Minayev adds, "The market is currently in a rare state of equilibrium—demand is slowing, prices are stabilizing, and builders are open to dialogue. This isn't a period of frenzy, but it's also not stagnation. This is a time for calculated decisions: when one can calmly choose an apartment, negotiate a discount, and take time to evaluate one's financial model without feeling rushed."
In June, projects by "Group LSR" offer conditions that may be particularly relevant during this phase of market equilibrium. Prices for apartments start from 2.7 million rubles, family mortgages with an interest rate as low as 4% are available, and discounts of up to 20% and interest-free installment plans are offered. Over 1500 apartments with floorside finishes are available in both completed and under-construction buildings. Among the current offers are apartments on the Shiroka Rechka, studios and two-bedroom apartments in the Zeleny Ostrov quarter on VIZ, the last options in Malakhite on the ZhBIS, and the "Kristallnye Klyuchi" option in Kompresorny, as well as convenient layouts in the first new housing project "Azina, 16" in the center of Yekaterinburg.
In light of the current market conditions, real-estate investors might find it challenging to secure affordable mortgage loans, as high interest rates and slow market activity have resulted in a "frozen demand" effect. Finance experts suggest that those eligible for the discounted mortgage program consider taking advantage of fixed rates now, as prices aren't decreasing but aren't increasing significantly either. On the other hand, news about potential expansions of the discounted mortgage program for certain demographics, such as families with children under 14, could have a significant impact on the real-estate finance sector in the coming years. Meanwhile, analysts advocate patience and strategic financial planning for those expecting market mortgages or the expansion of the program, as decisions regarding these matters are yet to be made.
