Growth of Average Mortgage Loans for Rural Real Estate in Russia: Causes and Prospects

Growth of Average Mortgage Loans for Country Real Estate in Russia: Reasons, Trends, and Prospects

Growth of Average Mortgage Loans: Key Data

Since the beginning of 2025, Russia has observed an increase in the average size of approved mortgage loans for country real estate. As of January, the average loan amount has grown to 5.679 million rubles, which is 52% higher than the figure for 2023 (3.741 million rubles).

This trend reflects structural changes in the economy, the real estate market, and borrower preferences. Key factors influencing this growth include government mortgage support programs and rising construction and land costs.

Main Reasons for the Increase in Loan Amounts

1. Preferential Mortgage Programs:
   Government initiatives have become the key driver of the market.

   • Rural Mortgage:
     • A program offering loans up to 12 million rubles at an interest rate of 3% per annum.
     • In 2024, demand for this program increased by 122%, indicating its popularity among residents of rural and suburban areas.
   • Family Mortgage:
     • Its share increased from 43% in 2023 to 52% in 2024, underscoring the program's importance for young families.

2. Rising Costs of Country Real Estate:

   • Increase in land prices: Greater interest in country properties leads to a rise in land costs, particularly near major cities.
   • Construction costs: Inflation and rising prices for construction materials escalate home building expenses, which directly affects the amount of loans requested.

3. Economic Instability:

   • Impact of inflation: Rising prices of goods and services compel Russians to plan for larger expenses on housing.
   • Weakening of the ruble and increases in the Central Bank's key interest rate raise loan costs, although preferential programs mitigate this effect.

The Role of Government Programs in Market Development

Government preferential mortgage programs stimulate demand for country housing:

• Rural mortgage: Supports the development of rural areas and sustains demand for housing and infrastructure in regions.
• Family mortgage: Makes housing more accessible for families with children, which is particularly relevant in the context of demographic challenges.
• Additional support measures: Expanding eligibility criteria and lowering interest rates make country housing attractive to new borrowing groups.

The Impact of Increasing Real Estate Costs

• Land prices: Increased demand for plots near cities with established infrastructure leads to higher land costs.
• Construction materials: Global inflation and supply chain disruptions contribute to rising material costs and, consequently, construction expenses.

Forecasts and Prospects

Experts estimate that the average size of mortgage loans for country housing will remain between 5-5.8 million rubles in the coming years. However, trends will depend on several factors:

• Further development of preferential programs: Extending and expanding their conditions will help sustain demand.
• Changes in economic conditions: A decrease in inflation and stabilization of the ruble could modify the market situation.
• Increasing income levels: Rising real incomes in Russia may further enhance the affordability of country real estate.

Commentary by Sergey Tereshkin, General Director of Open Oil Market

“The increase in the average size of mortgage loans reflects structural changes in the country real estate market. Preferential programs have become not only a support for citizens but also a vital tool for developing regional infrastructure. However, the rise in land and construction prices requires further attention from the government and the banking sector.”

Conclusion

The increase in the average size of mortgage loans demonstrates a sustained interest among Russians in country real estate, particularly in light of the favorable conditions of preferential programs. At the same time, rising prices and inflation necessitate a comprehensive approach to ensure housing affordability. Balanced market development will be a key factor in supporting the economy and meeting citizens' demand.