The developers' safety margin is running out

Deputy Prime Minister of the Russian government, Marat Khusnullin, said that the domestic housing developers' margin of safety has almost been completely exhausted. His main concern when discussing possible changes to the family mortgage conditions is the risk of a decrease in the volume of housing loans. According to Khusnullin, a decrease in the issuance of mortgage loans could have a serious impact on the construction sector. "We have exhausted the margin of safety that builders and developers had from 2024. We cannot continue to squeeze the industry, as it would create direct risks," he emphasizedIf developers stop, so do their suppliers: metallurgists and manufacturers of building materials. In addition, revenues to regional budgets decrease, which in turn reduces funds for social benefits, roads, public utilities, and other programs, including support for participants in the special military operation. All of this is funded from regional budgets. Therefore, the mechanism is very complex and multifaceted. It cannot be cut off with a single decision, as this could lead to negative consequences," Khusnullin explained. If developers stop, so do their suppliers: metallurgists and manufacturers of building materials. In addition, revenues to regional budgets decrease, which in turn reduces funds for social benefits, roads, public utilities, and other programs, including support for participants in the special military operation. All of this is funded from regional budgets. Therefore, the mechanism is very complex and multifaceted. It cannot be cut off with a single decision, as this could lead to negative consequences," Khusnullin explained. He clarified that the share of the construction complex in the revenues of various Russian regions ranges from 15% to 21%. Speaking about the current decline in housing construction in the country, the Deputy Prime Minister described it as a negative consequence of the cooling of the mortgage market in 2024. According to Rosstat data, in the first quarter of 2026, the volume of housing construction decreased by 28% compared to the same period last year, reaching 23 million square meters. Khusnullin drew attention to the long investment cycle in construction: the results of 2025 reflected the situation in 2023, and in 2026, the effects of 2024 were being felt. "Let me remind you that we started cooling down the mortgage in 2024. Unfortunately, the results of this cooling and the increase in the key interest rate are negative," he said. At the same time, the Deputy Prime Minister emphasized that the investment and construction cycle is wave-like, and during periods of decline, it is necessary to prepare for a new upsurge. "I urge the governors to do just that. The current situation with mortgages is challenging, and the key is to complete the construction of existing apartment buildings so that people can receive their homes. This requires the preparation of urban planning documents (which are relatively inexpensive), design and estimate documents, as well as networks and roads. Once the economic situation improves and interest rates stabilize, we must be prepared for a new growth phase. The key task for this year is not to fall below 100 million square meters," said Khusnullin. He also noted that the reduction in construction volumes is naturally higher in those regions where more housing was previously built than the target set by the Infrastructure for Life national project (0.82 square meters per person). As an example, Khusnullin cited the Krasnodar Territory: "They have consistently built about one meter per person from year to year. Therefore, their decline is natural - during this time, free sites with networks are selected, and the urban development potential is exhausted." At the same time, according to him, 18 regions of Russia, despite the difficult economic situation, have prevented a decline in housing construction. "It all depends on how each region handles construction and what progress has been made. This determines the dynamics of the process," the Deputy Prime Minister concluded.