Mortgage Registration Outside the Region of Residence Will Be Prohibited
Russia`s mortgage market is nearing stagnation. In the first half of the year, banks issued 1.5 trillion rubles in mortgages, a 47% decrease from the same period in 2024. Against this backdrop, a new government proposal to prohibit obtaining family mortgages outside the region of registration appears highly questionable. It`s likely this measure will simply exclude many families with children from the subsidized state program, which remains their only viable option for buying property.
State statistics show that 340,000 loans were issued in total during the first half of the year, 55% fewer than in the comparable period of 2024. Subsidized programs accounted for 63% of transactions (81% by value).
According to Federation Council speaker Valentina Matvienko in late June, over half of the family mortgages issued last year were in the major metropolitan areas: Moscow, the Moscow region, St. Petersburg, and the Leningrad region. The remaining borrowers resided outside these areas. The Federation Council called for improving the issuance mechanism, stating that as the program targets families with children, it should strictly serve to improve housing conditions for this demographic within each specific region.
Anatoly Aksakov, head of the State Duma Committee on Financial Markets, stated that a bill could be introduced in parliament within a month, which would prevent Russians from obtaining family mortgages outside their registration region. This measure could take effect as early as the first quarter of 2026. Real estate experts believe the bill will be approved (given the support in both the Federation Council and State Duma) but also highlight the risk of reduced demand due to potential bureaucratic hurdles.
Specifically, some borrowers may need to change their registration address before buying property, which might be unacceptable or overly cumbersome for them. Vladimir Chernov, an analyst at Freedom Finance Global, suggests this would also increase the administrative burden on banks and, in the long term, decrease mortgage approval rates. As a result, issuances could drop by another 30%, particularly in large cities.
«This is a strange initiative, as the subsidized state program is inherently aimed at families with children, not specific territories,» says Alexey Zubets, director of the Center for Social Economy Research. «If you live in Irkutsk, why shouldn`t you be able to buy an apartment on a mortgage in Moscow and move there? It`s not another country…». The expert outlined several reasons why authorities might be willing to adopt such a restriction. Firstly, it would reduce costs, as the state co-finances every third mortgage issued. Secondly, to some extent, it could curb migration to megacities: officials are convinced that once a family moves to the capital, their desire to have a second or third child diminishes. Furthermore, authorities aim for maximum targeting of subsidized programs, not wanting them used for investment purposes.
According to Zubets, since family mortgages are a crucial source of funds for banks and developers, the measure might face significant lobbying resistance from their side.
«This is a very questionable initiative,» states Polina Gusyatnikova, Senior Managing Partner at PG Partners law firm. «The Russian Constitution declares freedom of movement throughout our country. Moreover, obtaining a family mortgage often inherently implies moving to another city. If the bill passes, a person won`t be able to purchase housing in another region under preferential terms unless they are registered there. But to get registered, you need to have housing where you can do so. This creates a Catch-22. It`s unclear what the legislators aim to achieve. Perhaps the measure is related to attempts to reduce the number of citizens using family mortgages for investment purposes. But there`s a much simpler way to achieve this – for example, allowing the purchase of only one property per family.»
The discussed initiative is not aimed at restricting citizens` mobility, but at preventing abuse within the state program, says Valery Tumin, director of the Russia and CIS markets at fam Properties. According to him, in recent years there have been increasing cases where borrowers obtained loans for housing in regions with cheaper real estate, formally qualifying for benefits but not planning to actually reside there. This practice reduces the program`s effectiveness, which is intended to support families in their actual place of residence and child-rearing. According to Tumin, the market is now moving towards a more balanced model: although the share of subsidized programs is still high, demand is shifting towards a more stable and targeted format.
