The Central Bank of Russia published its review of project finance in housing construction for 2024 Q4, reporting that banks’ property development loan portfolios grew by 2% over the quarter, down from 9% in the previous quarter. The slower expansion was attributed to developers commissioning a large number of residential properties at year end and using funds released from escrow accounts to repay outstanding loans. Escrow account balances fell by 8% in the quarter to RUB 6.4 trillion, and the coverage of outstanding development loans, including new lending, by escrow balances declined by 8 percentage points to 72%. Against this backdrop and higher market interest rates, the average rate on property development loans increased to 9.4% per annum, while remaining below the market interest rate.
Central Bank of Russia 2025-03-10
Central Bank of Russia reports property development loan growth slowed to 2% in 2024 Q4 as escrow releases reduced coverage
The Central Bank of Russia's review of project finance in housing construction for Q4 2024 shows a 2% growth in banks' property development loan portfolios, down from 9% in the previous quarter. Escrow account balances decreased by 8% to RUB 6.4 trillion, with coverage of outstanding development loans dropping to 72%. The average rate on property development loans rose to 9.4% per annum amid higher market interest rates.