‘This year for the individual housing construction market will be worse than the next one, 2026’

Will rural mortgage criteria be tightened?

Statistics on the purchase of land in Tatarstan have been steadily growing over the past few years. Thus, in 2024, 101,651 plots were purchased in the republic, an increase of 50% compared to 2020. And compared to pre-COVID 2019, buyer activity has tripled! This was reported by head of the Happy Home real estate agency Anastasia Gizatova. Vice President of the Guild of Realtors of the Republic of Tatarstan Andrey Savelyev also notes good demand for individual housing construction, explaining this by the fact that preferential programmes have remained in fact only for this category of housing, and the cost per square metre of an individual house is still significantly lower than for an apartment in a new building.

“On the other hand, there are factors threatening the market. Firstly, this is rural mortgages, which they want to “move” 50 kilometres from the city. And our main purchases are concentrated in this fifty-kilometre zone. Secondly, demand will be affected by the rise in the cost of housing: both building materials and land plots are growing in price. Therefore, the situation on the market, according to our expectations, will be ambiguous this season. Although not as critical as on the market of multi-apartment housing,” says Andrey Savelyev.

Farsel Imatov, a representative of Flat company, shared another insider tip on rural mortgages: the distance of the property will not be limited to 50 kilometres from the city, but the category of borrowers who will have access to such lending will be limited. There are suggestions that rural mortgages will be somewhat similar to IT programs: the borrower will have to work in agriculture or be a civil servant and not change their field of activity during the entire repayment period.

But for family mortgages, as the expert says, there is a “burden”: banks ask developers for a commission, which leads to an increase in the cost of the property. Farsel Imatov gave an example: in one of the largest banks, the increase in cost is at the level of 5-6%.

“I don't want to bring negativity, but I think the year will be difficult for everyone”

Discussion participants note that there are fewer and fewer emotional purchases now. Houses and plots are bought consciously, with a focus on important things. Head of Korner company Sergey Stepanov notes:

“The share of mortgages in our company was 85-90%, and now it has fallen to 15%. But I hope that from March, when the season begins, it will be better than today. The dynamics will be positive, although not as strong as, say, last year.”

But head of Laboratory of Correct Designs Ruslan Gilyazetdinov doubts the positive dynamics. Comparing the situation with the previous two or three years, he predicts:

“This year will be worse for the individual housing construction market than the next one, 2026. I think the overall dynamics will be negative, but not fatal for established companies with experience, a solid foundation, and a staff of good specialists. The approaches that were used in construction before will be revised. I think that now everyone is asking the question at strategic sessions: “What are we doing next? How do we build, what do we build from? What new trends exist in the market that we can bring to Tatarstan?” Demand will fall due to a sharp decline in the share of credit clients. The market is waiting for a period of adaptation. Various regulatory organizations will analyze the novelties: they will see how the season goes, and will make decisions on how to help the developer, save the client’s money. Because it is clear why these measures were introduced, and I think everyone agrees with this. There is a sober thought there, but there are also aspects which were not taken into account and were not discussed with developers. I do not want to bring negativity, but it seems to me that this year will be difficult for everyone.”

However, creator of the cottage villages Khanskaya Usadba and Altyn Ilyas Gimadov looks at the situation optimistically:

“There will definitely be deferred demand,” the developer reasons. “I have been involved in real estate since 2013, and such moments have always been: 2018, 2020, 2022 — the market ‘stood up,’ but then ‘shot up.’ But for this, a decrease in the key rate is needed. As soon as it returns to comfortable values, the rubber band will break, and deferred demand will begin.”

However, as Artur Khafizov notes (he is currently developing and building the Little Tokyo cottage village), demand has not decreased, people still need housing. The problem is in financing instruments. People want to buy country houses, but today they are stopped by the lack of support programmes.

According to Andrey Savelyev, 80% of Kazan residents need better housing conditions — about a million people in total. But if until last year about a third of those in need could afford to expand or buy their own home, now their number is less than 5%. As already mentioned, mortgage lending in the structure of payment mechanisms has shrunk to 10-15%, instalments and cash rule the market.

Prices are rising and will continue to rise

Farsel Imatov also says that in their company, clients with cash are now about 80-85%. The interest rate, in his opinion, is becoming a determining factor for many clients who would like to take out a mortgage loan, but do not have such an opportunity today.

As Artur Khafizov notes, the main difficulties for this reason are currently experienced by the economy segment of individual housing construction. But the higher segments remain stable — people do not stop buying houses there. There is interest, there is also deferred demand, because the term of deposits made at a high rate is about to expire, and consumers are not averse to investing money in real estate.

The general rise in the price of land, building materials and the narrowing of demand from credit clients are forcing developers to look for ways to maintain sales dynamics. Head of the Sales Department of the cottage village Yagoda Malina under construction in Zelenodolsk District . Radmir Latypov says:

“Now developers are at a crossroads. The first way is to go to comfort plus and premium. Look: no matter how hard the times were, premium cars have always sold. The second way is to change construction materials to a more economical segment. Move away from stone, switch to frame and modular construction, reduce costs. There is positive experience in both of these options, you just need to guess which one will work in your case.”

One way or another, prices for individual houses are growing and will continue to do so. As the brunch participants rightly note, until now it was possible to convey the idea: “Having sold a one-room apartment, you can buy a country house of 110 sq. m. with land, and there will still be enough left for a car.” Now this is far from true.

The buyer chooses more valuables for himself, and it's time for the developer to start valuing his work

Ivan Lashkov, who is building the cottage village Rozhdestveno ECO Village, notes an interesting trend: a client who comes “with cash” chooses more valuables for himself: for example, a house with finishing, landscaping, blind areas and even a ready-made fence. Until now, no one wanted to overpay for this — people put off landscaping for later. However, not everyone confirmed this trend. Artur Khafizov notes the opposite situation: earlier, people mortgaged a house with finishing and a kitchen set, and now there are deals with pre-finishing, because the mortgage is limited to 6 million — this price no longer “fits” the finishing.

As Radmir Latypov (Yagoda Malina cottage village) notes, now each developer must offer three different options: rough, pre-finishing and finishing. The higher the variability, the better, because the buyer wants to get answers to questions in one window.

Due to the rise in the price of a square meter, a trend is developing to reduce the area of individual houses: now an area of 150-200 square metres is already a rarity. People buy either economical houses with an area of up to 100 square meters, or immediately large Business Class cottages of 300 or even 400 square metres. The “golden mean” has practically disappeared from the market. Thus, the trend typical of modern apartment buildings has spread to the individual housing construction market: economy-class apartments in new buildings do not differ in gigantic areas, now families with two children can be satisfied with a European-style two-room apartment.

Founder of the construction company Khansky Dom Ilyas Gimadov is confident that the growth of prices per square meter in the individual housing construction market is not just a forced process, but also fair from an ethical point of view. The situation when a square meter of a private house together with the land was significantly lower than a square meter of a tiny apartment in a new building in the same area will not return.

“I am sure that we, developers, in general simply do not value our work,” said Ilyas Gimadov. “It is time to do this. Those companies that pass this stage will have to start earning. Pay high salaries to employees, pay taxes, work “in the white”. It was always difficult for us to compete with chaotic players who worked as they had to, because our prices were always higher. And clients always came and said: ‘Why is it more expensive? After all, you build identical houses with them.’ But I’m not talking about technical issues — after all, if you delve into this topic, there will be nuances there too. I always tell my clients: ‘Look, the estimate consists of 100 points. You can save on each point. And even if you save 10,000 on each, you’ll end up with a million. For example, wood: there is first grade, second grade and deadwood. An ordinary consumer not from this industry, accepting their home, will never understand the difference. It will seem to them that they saved several million, but no one checks the quality of the materials at the stage of handing over the house. You will understand everything when you start living in a poorly built house.’ The market was like this, but it is changing. A year or two will pass, and the transition period will end. And you and I need to raise the price. Include everything in it! The time of chaotic spot development is over, the time of organized villages is coming.”

A clear trend that many participants of the brunch noted is the transition from spot development to full-fledged development. From individual houses to cottage villages and the development of social infrastructure. By the way, this makes a significant contribution to the overall increase in the price of a square metre of individual housing construction.

“Now, in order to launch any new village in Tatarstan, you first need to coordinate the planning project with the Ministry of Construction. Before, it was only necessary to coordinate with the district. Accordingly, now all new villages will take longer to launch, and the check at the start will be higher. Because there are more requirements for access, landscaping, and communications. All those spatial development standards that were previously applied to Kazan are now extended to districts and villages. All this leads to an increase in the check. This forces developers to adapt. Making an economy-class village now is a very controversial decision. After all, the check will need to be made to cover all these costs: houses with landscaping, in finishing, etc. Perhaps, houses should be made smaller to keep the check affordable for the buyer,” said Ivan Lashkov.

Radmir Latypov added that the requirements for social infrastructure are growing, and if earlier a house in an open field did not bother anyone, now buyers have questions about a school, a clinic and the presence of asphalt on the driveway before questions about the house itself. The time of chaotic point development is gone, the time of organized cottage villages is beginning. And here, developers are also waiting for a trend that is moving from multi-story development: when the developer of a new microdistrict also builds a school, and builds a road, and organizes other infrastructural benefits of civilization. At the same time, a number of developers note: until now it was very difficult to compete with small construction companies that build houses “in the open field”, without landscaping. After all, the entry cost there is 15-20 percent lower than that of developers who are engaged in the comprehensive development of their projects.

Andrey Savelyev voices the position of the realtor community, and it coincides with the opinion of developers: the future of individual housing construction is cottage villages.

“The same thing will happen as in the market of apartment buildings. Developers see healthy competition among themselves, and it allows them to develop new solutions. I think that in five years we will see a pool of strong companies in individual housing construction that build a lot, build entire villages, and the quality will improve. We will see such things as good neighbourliness, enhanced landscaping and other tools of fair competition. Without them, the development of cottage villages is unthinkable.”

“I think the future belongs to individual housing construction”

Describing the general trends in demand, head of Happy House real estate agency Anastasia Gizatova, says with conviction:

“I think the future belongs to individual housing construction. The market will continue to grow. The introduction of the escrow scheme will remove the risks of the impossibility of putting the house into operation, and the number of buyers will increase. The main demand for is concentrated in the budget up to 15 million rubles. Moreover, buyers do not have any special specific requirements for the area of the plot. They are loyal to both five hundred square metres and ten hundred square metres.”

To be continued