Thanks to mortgage innovations in July, families with two minor children living in small towns and regions with low housing construction can take out a preferential mortgage. That’s just how to take it, if out of 809 small towns in Russia, only 71 have new buildings, and 35 regions on the preferential list are only 13% of the country’s new housing
How many times have they told the world… But if we repeat it again, it will not be worse: since this July, the preferential mortgage system in Russia has changed dramatically. Mortgages with state support, which for a long time kept loan rates in the segment of new buildings at an extremely low level, ceased to exist, and here, in general, everything is clear. Now we just need to see how deep the drop in sales will be (and it will be — do not go to the fortune teller, some just talk about minus 10-15%, and others about minus 65-70%) and how quickly the primary market and its customers will adjust to the new rules of the game.
There are also generally no issues with a family mortgage extended until 2030. They will be able to take out a preferential loan at 6%:
- families with a child under the age of six inclusive (age is taken into account on the date of conclusion of the loan agreement, and until the child is seven years old, he is a mortgage “earner”);
- families raising disabled children (regardless of their age);
- families with two minors at the time of the conclusion of the loan agreement of children — for the construction of an individual house.
Perhaps the most interesting new point is related to the opportunity provided to families with two minor children to purchase an apartment rather than a house with the help of a preferential mortgage. Alas, this will not be available to everyone, but only to residents of certain territories of the country. The list includes, firstly, small towns with a population of up to 50 thousand people (traditionally – with the exception of small towns in Moscow, St. Petersburg, Moscow and Leningrad regions). It should be noted that the population of the city will be determined according to Rosstat data at the beginning of the year preceding the year of conclusion of the loan agreement.
Secondly, the preferential list includes regions with individual development programs (Altai, Altai Territory, Republic of Mari El, Republic of Khakassia, Pskov Region and so on). Finally, thirdly, regions with low volumes of housing construction were included in the list. As a result, there were 35 regions in total, and their residents, we repeat, until 2030 have the right to apply for a preferential loan both for housing and communal services (with certain conditions) and for the purchase of an apartment in a new building.
Experts of the company “CYANOGEN.Analytics” studied the market of new buildings in these 35 regions and found out what share it makes up of the entire market of the country, how the volumes of housing commissioning, demand and supply differ*. Here are a few conclusions that the study came to.
In 2023 and January-May 2024, only about 13% of all new housing in the country was commissioned by developers in the analyzed regions. Especially low rates are in the Jewish Autonomous District, the Magadan Region, the Nenets and Chukotka Autonomous Districts, the Murmansk Region, and the Altai Republic — less than 0.1% of the total input volume. And 0.2% of the Trans—Baikal Territory, the Kurgan Region or the Komi Republic is a little more. The only exceptions are, perhaps, only three regions listed in the list: the Nizhny Novgorod Region (it ranks 14th in the all-Russian rating in terms of housing commissioning over the past year and a half), Dagestan (22nd place) and Chuvashia (26th place).
“In general, about 35 million people, or 24% of the total population of the country, live in these regions. But the share in the volume of active supply in the real estate market in these regions is significantly lower than in the population: only about 5% of apartments in the new construction market of the Russian Federation are concentrated here,” CIAN continues.Analytics”. And they emphasize that the volume of supply is extremely unevenly distributed: 20% of all lots are in the Nizhny Novgorod region, another 12% in the Altai Territory, 9% in the Republic of Adygea, 7% in the Omsk region, 6% in the Saratov region (that is, more than half of the total supply is concentrated in five of the 35 regions). Another 46% of all lots are located in 24 regions, which generally have an active offer on the market.
But there are six regions (the Jewish Autonomous District, the Magadan Region, the Murmansk Region, the Nenets Autonomous District, the Republic of Ingushetia and the Chukotka Autonomous District) in which experts have not found a single advertisement for the sale of primary products posted on the website cian.ru . Of course, it can be assumed that sales there are conducted through some other aggregator – say, through Avito, and yet the conclusion is “CYANOGEN.Analysts” seems to be correct: in these regions of the Russian Federation, the family mortgage program is almost not relevant. Although it is worth recalling that in regions where there are no new buildings, families with disabled children can buy secondary housing on a preferential mortgage.
Finally, as for the number of transactions: here the share of the listed 35 regions is 11% of the entire Russian market. “The Nizhny Novgorod Region leads by a significant margin (14% of all transactions in the analyzed subjects of the Russian Federation in 2023 and the first half of 2024), the Altai Territory (9%) and Chuvashia (8%) are also in the top three. The ten leaders account for 63% of all transactions. At the same time, in four regions (Jewish Autonomous District, Magadan Region, Nenets Autonomous District, Chukotka Autonomous District) there were no transactions on the market of new buildings during this period, and in Ingushetia and Murmansk region only 12-14 apartments were sold in 1.5 years,” CIAN notes.Analytics”.
A little earlier, the company’s experts presented a similar analysis for small towns with a population of up to 50 thousand people*. Here, perhaps, to understand the alignment, you need to know only a few indicators. Small towns are 809 out of 1,135 cities in Russia, that is, a clear majority, but only about 16.3 million people live in them, that is, about 11% of the country’s population. Only 71 out of 809 cities have new buildings at all, for the rest a preferential family mortgage is simply meaningless (unless, of course, we are talking about buying housing in urban apartment buildings). In general, the volume of primary supply of small towns is 1.7%, and if excluding the Moscow and Leningrad regions — even 1.5% of apartments represented on the Russian market of new buildings. Exactly the same indicators are for the number of primary transactions: 1.7% of the entire Russian market or 1.5% excluding the cities of the Moscow and St. Petersburg regions.
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The ten cities with the largest choice in the market of new buildings account for 75% of the total “small-town” supply. That is, three out of four apartments on the primary market in small towns are sold in the following locations: Guryevsk, Zelenogradsk, Svetlogorsk, Pionersky (Kaliningrad region), Kommunar, Kirovsk (Leningrad region), Alushta, Sudak (Crimea), Temryuk (Krasnodar Territory) and Aksai (Rostov Region). Obviously, these are mainly locations in regions with high demand from residents of other subjects of the Russian Federation.
“Preferential programs in the primary market (including family mortgages) are irrelevant for most small towns — there are almost no new buildings in them. It is difficult to quickly increase the volume of construction and it does not always make sense: in many cities, the population is declining. The experience of the Far Eastern mortgage shows that this support measure works in cities with high migration attractiveness, but cannot by itself stop the outflow of population from the periphery of the regions: housing affordability (in particular, due to low mortgage rates) is not the only factor in increasing the attractiveness of the location, we also need places of employment, high—quality infrastructure and and so on. It may be more effective for small towns to extend state support programs to the secondary market, as well as to provide loans at preferential rates for the construction of individual houses — there is a need for such a banking product, since many small towns consist of low—rise blocks,” the CIAN expert believes.Analysts” Elena Lapshina.
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