Tatarstan’s mortgage market plunges, but stays afloat

Residents of the republic buy apartments on credit even at a rate of almost 30% per annum

Tatarstan’s mortgage market plunges, but stays afloat
Photo: коллаж "Реального времени"

Mortgage rates in Russia have approached 30% per annum and are, in fact, prohibitive. Against this background, residents of Tatarstan have reduced new loans for the purchase of housing by 40%. However, there are thousands of people in the region who want to buy apartments on loan, even under such harsh conditions, and the republic itself is one of the five regions with the largest volume of mortgage loans by the results of 2024. Realnoe Vremya, with the help of experts from the country's leading banks, tried to figure out what motivates such desperate borrowers and whether their resolve threatens a wave of defaults.

Mortgage market in Tatarstan has fallen by 40%

In December 2024, over 2,200 residents of Tatarstan received mortgage loans totalling 9.62 billion rubles. Each of them borrowed an average of 4.3 million rubles for 273 months (22 years and 9 months). Such data was provided to Realnoe Vremya by the United Credit Bureau (OKB). The majority of these borrowers — 1,400 — took advantage of the right to a preferential mortgage and received loans in the amount of 7.36 billion rubles (5.25 million rubles each) at 6% per annum for an average period of 312 months (26 years).

The remaining 833 people were not afraid of the harsh realities, when the base rate of classic mortgage loans reaches 29.8% per annum, and took out loans of more 2.25 billion rubles secured by the purchased real estate.

“Mortgage conditions vary depending on the chosen program," explains Maryam Davletshina, VTB Tatarstan managing director and vice president. “For market programs, the base rate is 29.8%, for Family and IT mortgages — 6%. The minimum initial contribution is 20.1% for government-supported programs, and 30.1% for market-based programs. The maximum loan term is up to 30 years.”

A year ago, in December 2023, there were 3.1 times more mortgage loan recipients in Tatarstan: at that time they took out 6,900 mortgages worth 32.3 billion rubles. Now the amount of loans has dropped 3.5 times month-on-month.

According to the results of 2024, more than 40,500 mortgages worth 184.1 billion rubles were issued in Tatarstan. In 2023 — 73,700 worth 303.6 billion rubles. Thus, the mortgage market in the region fell by 45% in terms of the number of loans issued over the year, and by 40% in monetary terms.

Since July 2024, the conditions of state-backed mortgages have been tightened in Russia, according to which the state subsidises a significant part of the interest rate to citizens through a bank. Since then, only families with children up to and including 6 years old and employees of IT companies can claim benefits. For the majority of Russians, a mortgage on market conditions remains affordable, the cost of which outstrips the sharply increased key rate of the Central Bank. For example, in September, the price of mortgage loans exceeded 20-22% per annum, and in November it reached 29% per annum.

Cuts in government programs were announced, triggering a surge in property deals. In June 2024, over 6,600 people in Tatarstan received mortgage loans in the amount of 33.6 billion rubles: an average of 5 million rubles for 299 months (24 years 11 months). The vast majority of them — over 4.96 people (75.2%) — managed to get a mortgage with state support. Under such conditions, the beneficiaries tried to take out loans in larger amounts — the average loan amount reached 5.6 million rubles and for a longer period — an average of 322 months (26 years and 10 months). The total volume of concessional loans received in June 2024 amounted to 27.8 billion rubles (in June 2023 — 12.3 billion rubles), which is more than a fifth (21.3%) of the total volume of government-backed mortgages issued during the year.

Mortgage at any price

In July, the mortgage market quieted down, but in Tatarstan that month there were still almost 1,600 borrowers who decided to take out a mortgage without benefits. They borrowed a total of 4.4 billion rubles from banks (the average check was 2.8 million rubles). In total, 2,575 mortgages worth 9.8 billion rubles were issued in the republic in July, with an average of 3.8 million rubles each for 249 months (20 years and 9 months).

In total, in the second half of 2024, almost 8,700 residents of Tatarstan borrowed 26 billion rubles from banks at increased rates secured by purchased real estate (on preferential terms — 7,500 people for 41.4 billion rubles).

Experts, who were represented by representatives of Russian banks with the largest mortgage packages, agree that in the current conditions it is possible to get 4.3 million rubles on a classic mortgage. (the average amount in December 2024), only those who have an official income of at least 120,000-150,000 rubles per month have such opportunity. They resort to borrowing in the expectation of early repayment or a further reduction in loan rates.

“Mortgages today are most often taken by people who have a consistently high income and expect early repayment of the loan," says Maria Davletshina. As well as those who need a small amount of credit to buy another apartment or house after the sale of existing real estate. In addition, some buyers are willing to take out a mortgage in the hope that in the foreseeable future there will be a reduction in the rate, and they will be able to refinance their loan at a lower rate, but they will receive their own housing now.

“In order to obtain a loan for the purchase of housing on the secondary market worth 6 million rubles, a borrower needs an initial payment of 1.7 million rubles. If the mortgage amount is 4.3 million rubles, the monthly income should not be less than 137,000 rubles. The average mortgage amount in Sberbank in December 2023 was 4.2 million rubles, and in December 2024 it was 3.7 million rubles," said Natalia Sheremetyeva, the head of the department of mortgage lending and development of Domclick services at the Bank Tatarstan branch of Sberbank.

Tatarstan is a leader in terms of mortgage volumes

In total, by the results of 2024, Russians took out 1.15 million mortgage loans worth 4.96 trillion rubles, the OKB estimated. Compared to 2023, loans decreased by 43%, and the volume decreased by 40% (in 2023, 2.01 million mortgages worth 8.26 trillion rubles were issued). The average mortgage loan size increased by 5% over the year, or 200 thousand rubles, from 4.1 million to 4.31 million rubles. The average loan term has increased by one year: from 256 months (21 years 4 months) in 2023 to 269 months (22 years 5 months) in 2024.

Tatarstan entered the top 5 regions in terms of mortgage lending volume for the month in December. The republic lost only to Moscow (5.28 thousand loans worth 38.05 billion rubles), Moscow region (3.55 thousand loans worth 21.66 billion rubles), St. Petersburg (2.83 thousand loans worth 15.49 billion rubles) and Krasnodar Krai (2.25 thousand loans worth 10 billion rubles).

Secondary housing in high demand

According to the OBK, residents of Tatarstan are more likely to take out a mortgage for the purchase of secondary housing. To this end, they received 54.9 billion rubles from banks in 2024. This is by 63% less than in the previous year (150.1 billion rubles). Tatarstan citizens took loans in the amount of 37.8 billion rubles for purchases on the primary market in 2024, compared to 100.4 billion rubles in 2023, the drop exceeded 62%.

In Tatarstan, the dynamics of reducing transactions is a little ahead of the national trend. According to the OKB, in 2024, 267.25 thousand mortgage loans for new housing in the amount of 1.39 trillion rubles were issued in the country, which is by 55% less in both quantitative and monetary terms than in 2023, when 598.26 thousand loans for the purchase of housing in new buildings in the amount of 3.06 trillion rubles were issued. In 2024, the share of new buildings accounted for 37% of the total number of housing loans and 49% of their total volume. A year earlier, the share of new housing was 34% of the total and 44% of the total volume of mortgages issued.

Housing loans in the secondary sector were issued to 457.33 thousand for 1.43 trillion rubles, thus the number of loans per year decreased by 60%, the volume — by 64%. In 2023, 1.16 million loans for secondary housing were issued in the amount of 3.92 trillion rubles. In 2024, the share of loans for housing on the secondary market amounted to 63% of the total number of mortgage loans issued, and 51% of their total volume, in 2023 the shares amounted to 66% and 56%, respectively.

The risks

Extreme mortgage rates entail the risks of an increase in overdue payments. Collectors are already noticing this trend both in Russia as a whole and in Tatarstan in particular. The deterioration of the mortgage default situation in 11 months of 2024 accelerated 13-fold in monetary terms compared to 2023 (+34.87 billion versus +3.39 billion), and 10-fold in percentage terms (+52.1% versus +5.3%). By December 2024, the portfolio of mortgage defaults exceeded 101.7 billion rubles.

“We predicted that by the end of 2024, the volume of overdue mortgages would exceed 100 billion rubles. And we were right. The threshold was crossed ahead of schedule — by December 1," says Denis Aksenov, the director general of Dolgovoi Consultant collection agency.

In Tatarstan, according to the Dolgovoi Consultant, overdue mortgage debt increased by 81% since the beginning of 2024 and exceeded 2.4 billion rubles by December. Despite that the mortgage loan portfolio as of November 1, 2024 in the region amounted to 796.1 billion rubles. The current situation with mortgage defaults in Tatarstan is somewhat better than in Russia as a whole: in the region, its share does not exceed 0.3% of the total mortgage portfolio, while the national average is 0.43%. However, the dynamics of delay growth in the republic is higher than the federal average (52% from the beginning of the year to December).

“An officially employed borrower with a proven income, a high Credit Bureau rating, and a low debt burden can afford a mortgage. The borrower must not be over 75 years old at the time of repayment of the debt. The individual must be employed and work at the current location for at least three months," notes Natalia Sheremetyeva.

However, representatives of banks do not see any serious risks in this, believing that they are minimised by rather strict conditions for approving loans. “Mortgage borrowers are traditionally the most disciplined borrowers," concludes Maryam Davletshina.

Olga Mashina

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