The tightening of rural mortgage conditions in Tatarstan is set to bring significant changes to the real estate market in the region. With the popularity of the program among residents of the suburbs of large cities, including Kazan, the authorities have decided to make the rural mortgage more targeted, exclusively for rural residents. This move comes after the success of the program in Tatarstan, which saw 533 rural mortgages issued for a total of 2.7 billion rubles as of August 1, 2024.
One of the main changes proposed by the Russian Ministry of Agriculture is to limit the territory of the program, excluding rural settlements and urban-type settlements located close to large cities and regional capitals. This adjustment aims to restrict the use of rural mortgages for the construction of summer cottages and houses in cottage villages, making it less attractive for city residents like those in Kazan who took full advantage of the program to buy affordable housing outside the city.
Under the current rules, the rural mortgage program offers a loan rate ranging from 0.1 to 3%, with a maximum loan amount of 6 million rubles. Spouses can take out two preferential mortgage loans for one property, increasing the amount to 12 million rubles. However, after the changes, the program will only be available for properties located at least 50 km from regional capitals and within a radius of 30 km from cities with a population of over 100 people, making it less accessible for city dwellers.
Despite the limitations, Tatarstan has been among the leading regions in terms of the volume of rural mortgages issued, with over 15 billion rubles worth of mortgage loans issued since the start of the program in 2020. The number of applications received exceeded 19,000 for about 60 billion rubles, indicating the high demand for affordable housing in rural areas.
Developers in the region have noted that the program’s restrictions on the number of floors have limited the purchase of housing on the new housing market, with private houses being the primary choice for buyers under the rural mortgage program. While the new changes may facilitate the development of territories at a significant distance from large cities, developers are concerned that the exclusion of rural areas near cities will hinder the overall development of these regions.
In conclusion, the tightening of rural mortgage conditions in Tatarstan is expected to have a significant impact on the real estate market, particularly for city residents who have been taking advantage of the program to purchase affordable housing outside urban areas. While the changes aim to target rural residents specifically, there are concerns about the impact on the overall development of rural areas near cities. It remains to be seen how these adjustments will shape the real estate landscape in Tatarstan in the coming years.
