Finance

cross-posted from: https://lemmy.sdf.org/post/40266243

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Nearly 20% of Russian property developers are at risk of bankruptcy due to plunging sales driven by high mortgage interest rates, Deputy Prime Minister Marat Khusnullin said.

Khusnullin, who oversees housing and infrastructure in the government, warned that this figure could rise above 30% if financial conditions do not improve in the next six months.

“By my estimate, about 20% of developers face serious risks,” he told the Vedomosti business daily.

Although every fifth construction company has already delayed project completion by six months or more, he said, this is not a surefire sign that they will go bankrupt.

“But if the [Central Bank's] high key rate continues, if money doesn’t flow into the sector, if citizens stop investing in real estate and if there’s no mortgage support, the share could exceed 30%,” he said.

Khusnullin added that conventional housing loans have “almost ceased to exist as a class” since the end of a broad state-subsidized program in July 2024.

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