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“It’s good for him who is in his own house.” Putin urged to resolve the issue of mortgages and new housing in Russia

Russian President Vladimir Putin announced the need to accelerate the pace of construction in the country, as well as to solve the problem of obtaining preferential mortgages and increase investment in the infrastructure of housing and communal services. Relevant instructions to the government the head of state gave 21st of June at a meeting of the Presidium of the State Council on strategy for the development of the construction industry and housing and communal services until 2030.

According to Putin, increasing the affordability of housing is one of the key areas of future work. He noted that for each family, their own home is a solid basis for giving birth, raising children and a happy and prosperous life.

Speaking about the situation with construction in 2021, the head of state recalled folk wisdom.

“It is not for nothing that our ancestors used to say: “It is good for the one who is in his own house.” According to surveys, more than 65% of Russians would like to improve their living conditions. We pay constant attention to this issue. Our builders did a great job last year. More than 92 million sq. m of housing,” the president said.

Putin said that the construction sector has “huge potential” as a “locomotive of the economy”, so this area needs to work without bureaucracy. He also instructed to extend the national project “Housing and Urban Environment” until 2030.

The President believes that the pace of construction should be kept at least at the level of 2021, and the mortgage portfolio should be increased by at least 2.5 trillion rubles.

Putin also instructed the Cabinet to speed up the resettlement of emergency housing. At the same time, he scolded officials who approve development without taking into account long-term plans or objects, the construction of which leads to a violation of the appearance of the territories. The terms for coordinating all stages of construction should be reduced, the head of state noted.

The president gave the regions 1.5-2 years to complete the construction of the frozen facilities. Despite the sanctions, the pace of construction should not be slowed down, he added, because this is the only way to solve the problem of housing in the country. Under the sanctions, it is necessary to bring the share of domestic suppliers to 95%, Putin stressed.

Putin also spoke about the depreciation of the housing and communal services infrastructure. According to him, this figure has already exceeded 40% throughout the country. It is impossible to improve the quality while everything works on old pipes, the head of state said. In addition, he clarified, it is necessary to reduce the number of dilapidated houses every year.

Another pressing problem in the housing sector, according to the head of state, is the difficulty of obtaining mortgages, including preferential ones. In this regard, the Russian leader called on the government and the Central Bank to deal with this issue as efficiently and quickly as possible.

  • The preferential mortgage program in Russia was launched during the lockdown in April 2020. In March 2022, the preferential mortgage rate was increased from 7% to 12%. From May 1, 2022, the rate was reduced from 12% to 9%, and the program itself was extended until the end of 2022.
  • In June, at a regular meeting, the Central Bank lowered the key rate from 11% to 9.5% per annum, to the level that was set before the outbreak of hostilities in Ukraine. According to the Ministry of Construction, the preferential mortgage rate for new buildings has been set at 9% since May.
  • In April, Russian banks faced a collapse in the mortgage market in April – the issuance of housing loans fell four times compared to March.
  • On June 17, the President of Russia during a speech at the St. Petersburg International Economic Forum (SPIEF) declared, which considers it possible to reduce the rate on preferential mortgages from 9% to 7%. He noted that the term of the preferential mortgage program will continue until the end of 2022.

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