Maxim Nikolayev: ‘New conditions for family mortgages will increase demand in the districts of the Kazan agglomeration’
In Russia, family mortgages have been extended until 2030, but with significant changes that primarily affected the advanced regions, including Tatarstan. The innovations have significantly reduced the circle of borrowers. At the same time, there are no plans to change the parameters of the programme in the near future, since the measure is highly dependent on the key rate of the Central Bank, Vice Prime Minister of the Russian Federation Marat Khusnullin said two days ago. In an op-ed column of Realnoe Vremya, Managing Partner of BMP Brands Group Maxim Nikolayev shares his opinion on the new conditions of state support and their impact on changes in demand in the republic's housing market.
Family mortgage before changes
Until July 2024, families with one child born between 1 January 2018 and 31 December 2023 and families with a disabled child born before 31 December 2023 could purchase a house, a flat in a finished block of flats or a block of flats under construction according to a shared construction agreement or a purchase and sale agreement. It was also possible to receive money for the construction of a house with the involvement of a contractor.
In addition, family mortgages were available to families with two or more children under 18 who could purchase a flat in a finished block of flats or a block of flats under construction with the help of a contractor.
The main parameters of a family mortgage loan included a minimum interest rate of 6% per year, a down payment of 20.1% of the property value, and a loan amount of up to 12 million rubles in Moscow and Moscow region, St. Petersburg and Moscow region, and up to 6 million rubles in other regions of the Russian Federation.
An important point is that there were no restrictions on the location of the property; it was possible to purchase housing throughout Russia.
New programme rules
After the changes that came into force in July 2024, families with at least one child under 6 years of age or a disabled child under 18, regardless of their date of birth, can apply for a mortgage at a rate of 6% to purchase a flat or build a house.
Families with two minor children can take advantage of this offer to purchase a flat or build a house only in 35 regions, or in small towns with a population of up to 50,000 people. The list of these 35 regions includes regions that need additional incentives of the construction industry, so Tatarstan, where there are no problems with the volume of housing construction, is not on this list. This means that in large cities of the republic, only those families with at least one child under 7 years old or a disabled child under 18 years old can count on a family mortgage at 6%. Families with two minor children will be able to use the programme only in small cities with a population of no more than 50,000 people.
The conditions for the amounts remained the same: you can still take out a mortgage of up to 6 million rubles with a minimum down payment of 20.1%. The exceptions are Moscow and Moscow region, Saint Petersburg and Leningrad region — there, the loan amount can reach 12 million.
What to buy — flats or individual houses?
A significant change was the condition for the purchase of a private house is only with a contractor through an escrow account within the framework of the conditions of the pilot project Individual Housing Construction with Escrow Account. On the one hand, it is a long-overdue decision that will protect buyers from unscrupulous developers first and foremost. After all, if something goes wrong at the construction site and the contractor is unable to fulfil his obligations, the buyer will receive his money back by law. On the other hand, under such conditions, the choice suffers greatly. The fact is that today there are very few developers of individual housing construction on the Tatarstan market who practise working with escrow accounts; this process has only just begun to be launched this summer and it will take quite a long time for more companies to switch to escrow accounts and establish their work in the new reality.
In this regard, I believe that when choosing a type of housing within a family mortgage, apartments, of course, have a number of advantages over individual housing construction projects:
- Firstly, such projects are built by developers who are renowned in the market, have a large selection of apartments of different configurations, including under shared construction programmes and have long been working with escrow accounts and have managed to establish all the processes.
- Secondly, blocks of flats are transferred to management companies that work according to generally accepted standards and the “utilities” headache of caring for and maintaining the house is removed from the homeowners.
- Thirdly, infrastructure. Apartment buildings are built in a complex, have landscaped courtyards, convenient access roads, an abundance of shops, pharmacies and other infrastructure within walking distance.
Development of the Kazan agglomeration
Updating the terms of family mortgages shifts the focus of buyers in the Tatarstan housing market towards the periphery. Under these changes, an increase in demand is expected, primarily for housing in areas located in close proximity to Kazan, which make up the Kazan agglomeration, and especially: Laishevo, Pestretsy, Zelenodolsk, Vysokaya Gora.
Currently, two large agglomeration projects of Big Zelenodolsk and Laishevsky Hub are actively implemented. In the first, by 2036, they plan to build about 5 million square meters of housing, in the second — about 4.2 million by 2030. In Laishevo, projects are implemented with the participation of federal funds, which will be used to build main utility lines: water, sewerage, pumping stations. This year, the M-12 East high-speed road from Moscow to Kazan opened. The construction of the bypass road of the village of Sokury is going at an accelerated pace. Speaking of social infrastructure, schools and kindergartens, hospitals and clinics are built.
Such development makes the area attractive for large companies, retail chains, enterprises that create new jobs, which, in principle, in the future may eliminate the need to go to work to Kazan and waste time to commute. All this, of course, is a weighty argument when choosing a place to buy a home.
To summarise, we can say that the updated family mortgage programme has expanded the age restrictions for children's dates of birth, but has narrowed the geography of its application in some regions, including Tatarstan. Families with children up to and including 6 years old will be able to purchase housing everywhere, and families with minor children from 7 years old — only in small towns with a population of up to 50,000 people. This will increase housing sales in the regions of the republic, mainly near large cities.
The districts of the Kazan agglomeration will be especially attractive where the urban infrastructure is close to the capital, there are jobs, and housing prices are much lower. In addition, buyers' attention will be focused mainly on flats, and not on individual housing construction, since according to the terms of family mortgages, developers are required to use escrow accounts. However, there are few such developers so far and the choice is limited.