Russia's Mortgage Market Braces for Two Years of Compression: VTB Sees 2024 Issuance Down 35% to About 5 Trillion Rubles and 2025 Down at Least 20%
The mortgage market in Russia is entering a second consecutive year of contraction, and the figures presented at the end of 2024 describe not a pause but a change of regime. At the "Russia Calling!" investment forum on December 4, 2024, VTB (ВТБ) forecast that full-year mortgage issuance would reach about 5 trillion rubles in 2024, roughly 35% below the record 2023, and about 4 trillion rubles in 2025, a further decline of at least 20%. Around the same time DOM.RF (ДОМ.РФ) put the 2024 tally at about 1.4 million loans worth 5 trillion rubles and sketched a 2025 range of 1.2 to 1.3 million loans worth 4 to 4.5 trillion rubles if rates stay above 20%. With the market rate at 28.4% on November 15, 2024, and subsidised issuance dipping in early November as programme limits ran out, this analysis unpacks how the compression works and whom it reaches.
VTB's forecast: about 5 trillion rubles in 2024, about 4 trillion in 2025
The headline of the "Russia Calling!" investment forum on December 4, 2024 was a two-year forecast of contraction. VTB (ВТБ) expects mortgage issuance of about 5 trillion rubles for the full year 2024, which the bank frames as a decline of about 35% against 2023, and about 4 trillion rubles in 2025, described as a fall of at least 20% against 2024. The forecast was reported by the Prime news agency (ПРАЙМ) on the day of the forum.
Two features of the forecast deserve attention before any interpretation. First, the 2024 figure is a decline from a record base: 2023 was the strongest year in the history of the market, and a 35% drop from a record means a larger absolute loss than the same percentage from an ordinary year. Second, the 2025 figure is explicitly a floor rather than a point estimate: "at least 20%" means the bank sees 4 trillion rubles as the upper bound of next year's issuance under its working assumptions, not as a central case with a chance of being revised upward.
The venue matters as much as the numbers. An investment forum is where a major bank speaks to the owners of capital, and a two-year contraction forecast delivered there is a planning signal: it tells investors, developers and counterparties that the mortgage engine of the construction sector will run at half speed through 2025, and that business plans built on the volumes of 2023 need to be rewritten rather than adjusted.
Read together, the two lines describe a market that loses close to half of its volume in two years while its price — the market mortgage rate — sits at levels that exclude most unsubsidised borrowers. The rest of this analysis follows the chain: the arithmetic of the decline, the independent count from DOM.RF, the structure of issuance that the compression leaves behind, the rate that drives it, the limits that cap even the subsidised part, and finally the consequences for developers and banks.
The arithmetic behind the percentages
The bank's percentages imply a scale that is worth making explicit, and the following figures are simple calculations from VTB's own numbers rather than additional source data. If 5 trillion rubles in 2024 is 35% below 2023, then the 2023 base is approximately 7.7 trillion rubles. The step from 2024 to 2025 removes another trillion rubles of annual issuance. Cumulatively, the 2025 figure of about 4 trillion rubles sits almost 48% below the implied 2023 base: in two years the market loses close to half of its record volume.
These derived magnitudes matter because percentages alone understate the shift. A market that originates 7.7 trillion rubles in one year and 4 trillion two years later is not the same market having a quieter season: the infrastructure of origination — bank branches, developer sales offices, appraisal and registration services — is sized for the larger flow and must either shrink or redeploy to other products.
DOM.RF's count: 1.4 million loans in 2024, 1.2–1.3 million in 2025
Nine days before the forum, on November 25, 2024, DOM.RF (ДОМ.РФ) published its own reading of the same year, and it matches VTB's volumes while adding the count of loans. According to a separate Prime report, about 1.4 million mortgage loans worth 5 trillion rubles are expected for 2024, a third below the record 2023, and — conditional on mortgage rates staying above 20% — 1.2 to 1.3 million loans worth 4 to 4.5 trillion rubles in 2025.
The loan count adds a dimension that volumes alone hide: the compression is not only about smaller cheques or fewer expensive purchases, it is about fewer families entering the market at all. A third of a record year's loan count is a very large number of households — and of developer sales — that simply do not happen.
The conditionality of the 2025 range is equally important. DOM.RF does not present 4 to 4.5 trillion rubles as an unconditional forecast: it attaches the range to a rate environment above 20%. Should rates move materially below that threshold, the range would need to be revisited; should they stay where autumn 2024 left them, the lower part of the range becomes the realistic one. The forecast is therefore a function of monetary policy first and of housing demand second.
Where the two forecasts meet
The two estimates were produced independently and published nine days apart, yet they agree on the 2024 volume: about 5 trillion rubles. For 2025, VTB's "about 4 trillion, at least minus 20%" sits at the lower edge of DOM.RF's 4 to 4.5 trillion range, and DOM.RF attaches an explicit condition — rates above 20% — that VTB's floor implicitly assumes. The overlap of the two ranges is the credible corridor for 2025: roughly 4 to 4.5 trillion rubles.
Combining DOM.RF's volumes and counts yields one more reading: an average loan of about 3.6 million rubles in 2024 (5 trillion divided by 1.4 million) and about 3.4 million rubles at the midpoint of the 2025 range (4.25 trillion divided by 1.25 million). The slight decline of the average ticket suggests that the mix shifts toward smaller loans as the market compresses — a reading derived from the institute's own figures, not a separate source fact.
The 2024 structure: Family Mortgage above 40%, market products about a third
A compressing market does not shrink evenly, and VTB's breakdown of the 2024 structure shows where the remaining volume concentrates:
- the Family Mortgage programme — more than 40% of 2024 issuance, the single largest pillar of the market;
- market-rate products — about a third of issuance, the segment that historically priced the whole market;
- the IT mortgage — the smallest volume among the named programmes;
- the residual share — other subsidised and targeted programmes outside the three named lines.
The distribution is the signature of the compression. When one subsidised programme accounts for more than 40% of all issuance and all market-rate products together hold about a third, the market has stopped being a market in the price-discovery sense: the majority of loans are priced by programme parameters set outside the banking system, while the minority that banks do price is priced at a level most households cannot reach.
The disappearance of market products is therefore not a cyclical dip in one product line. It is the effective exit of the unsubsidised mortgage from the mass market: at the rates of autumn 2024, a market-rate loan is a niche instrument for borrowers with unusually high confirmed income or an unusually large down payment, not a mass product.
The smallest volume of the IT mortgage completes the picture: even inside the subsidised set, programmes with narrow eligibility criteria cannot replace the mass line, and their contribution stays symbolic next to the Family Mortgage pillar. Structure, in other words, has become a function of programme design rather than of borrower preference.
28.4%: the market rate that emptied the market segment
The price side of the story is a single number with a steep trajectory: the market mortgage rate stood at 28.4% on November 15, 2024, which is 6.1 percentage points higher than at the beginning of October. The implied early-October level of about 22.3% was already restrictive; the six-week move to 28.4% tracks the policy rate environment of autumn 2024 and pushed market-rate mortgages beyond the payment capacity of the median borrower.
The pace of the move is itself informative. Six and a tenth percentage points in about six weeks is on the order of one percentage point per week — a derived reading from the two dates in the source — and at such a pace any long-dated housing decision is postponed: between loan approval and signing, the rate can change more than the terms of the deal itself.
This is the mechanism that connects the rate to the structure described above. As the market rate climbs, the payment on an unsubsidised loan grows faster than incomes, applicants fail affordability checks, and banks themselves tighten approvals. Demand that still needs housing does not disappear; it migrates to the subsidised programmes where the rate is set by the state — which is exactly why the Family Mortgage line exceeds 40% of issuance while market products hold about a third and keep losing ground.
An illustrative payment calculation
The scale of the barrier is easier to feel in monthly payments than in annual percentages, and the following example is a calculation on stated assumptions, not source data: take the derived average 2024 loan of about 3.6 million rubles, a 20-year term and the market rate of 28.4% observed on November 15, 2024. An annuity schedule at these parameters produces a monthly payment of roughly 85,500 rubles, of which about 85,200 rubles in the first month is interest alone. The source does not publish programme rates, so no comparison payment is computed here; the point of the example is narrower — at 28.4%, the first-month interest on an average-sized loan exceeds the monthly rent of a modest apartment several times over, and the unsubsidised mass market simply cannot clear.
Limits and the November dip in subsidised issuance
If the market-rate segment was priced out, the subsidised segment was rationed. In early November 2024 subsidised mortgage issuance dipped because the limits of the programmes were exhausted: the state-supported pillars of the market run on fixed envelopes of funding, and once an envelope is spent, issuance stops or slows regardless of demand.
The dip has three consequences for reading the 2024–2025 compression. First, it shows that the subsidised pillar has a quantity ceiling of its own: even unlimited demand cannot convert into issuance once the limit is gone. Second, it makes the timing of a purchase a function of programme calendars rather than of household readiness — borrowers rush to book loans before limits run out, which inflates earlier months and deepens later dips. Third, it means the 2025 forecast of 4 to 4.5 trillion rubles depends not only on rates but on whether new limits and renewed programmes reopen the rationed channel.
The borrower between the rate and the limit
For a household, the compression looks like three closed doors. The first is the market rate of 28.4%: the payment on an average loan is unaffordable without an exceptionally high income. The second is programme eligibility: the Family Mortgage line requires meeting its criteria, and a family without the required status or without a qualifying property does not get into the programme. The third is the limit itself: even an eligible family in early November 2024 could face an exhausted programme envelope.
The natural reaction of such a household is to postpone the purchase and stay in rental housing or with relatives while saving for a larger down payment. That behaviour is rational, but it deepens the compression: postponed demand does not vanish, it accumulates in future years and will return to the market as a single wave if rates and limits allow — which makes the trajectory beyond 2025 highly sensitive to any easing of conditions.
What the compression means for developers and banks
The source's figures do not come with a sectoral impact study, but the chain from issuance to the real economy is short enough to trace as a reading of the same numbers. For developers, mortgage lending is the financing of their sales: an implied 7.7 trillion rubles of buyer credit in 2023 becoming about 5 trillion in 2024 and about 4 trillion in 2025 means a buyer pool that narrows by roughly half in two years. With more than 40% of issuance inside the Family Mortgage programme, effective demand concentrates in households eligible for that programme — families with children — and project planning, flat mix and pricing increasingly have to speak to that audience rather than to the broad market.
For banks, the compression cuts the origination business from both sides. The market-rate book is effectively frozen at 28.4%: few borrowers qualify, and those who do are priced at levels where credit risk and reputational risk rise together. The subsidised book is capped by programme limits, as the November dip demonstrated, and its economics for a bank depend on programme subsidies rather than on margin. A market that originates 4 trillion rubles instead of 7.7 trillion also supports fewer cross-sells — insurance, cards, deposits linked to mortgage servicing — so the revenue footprint of the mortgage franchise shrinks faster than the headline volume.
Neither sector can offset the compression with price: raising developer prices against a halving pool of financed buyers would deepen the sales problem, and raising bank rates above 28.4% would price out the remaining unsubsidised demand entirely. The adjustment available to both is quantity and mix — fewer launches aimed at programme-eligible buyers, fewer originations concentrated inside subsidised envelopes — which is precisely the shape the 2024 structure already shows.
The shape of the 2024–2025 compression
The forecasts of December 2024 describe a single process seen from four angles — volume, count, structure and price:
- volume: about 5 trillion rubles in 2024, down about 35% from the record 2023, and about 4 trillion rubles in 2025, down at least 20% further, per VTB;
- count: about 1.4 million loans in 2024 and 1.2 to 1.3 million in 2025 on rates above 20%, per DOM.RF;
- structure: Family Mortgage above 40% of 2024 issuance, market-rate products about a third, the IT mortgage the smallest named line;
- price and rationing: a market rate of 28.4% on November 15, 2024, up 6.1 percentage points since early October, and an early-November dip in subsidised issuance as programme limits ran out.
This regime has three indicators worth watching through 2025 without leaving the source's boundaries. The first is the level of the market rate relative to the 20% threshold to which DOM.RF tied its range: a move below the threshold changes the forecast frame, while holding above it preserves the frame. The second is the state of the subsidised programme limits: new envelopes mean issuance continues, while a pause between envelopes repeats the November dip at a larger scale. The third is the Family Mortgage share of the structure: holding above 40% confirms rationing, whereas a return of market-rate products to a third of issuance and beyond would signal the return of the price mechanism.
Taken together, these four angles describe the transition of the mortgage market from a mass market priced by banks to a rationed market priced by programmes. The compression of 2024–2025 is not a dip to be waited out; it is the market's new operating regime, and every participant — borrower, developer, bank — will have to plan inside it.
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