Sberbank has dramatically cut mortgage rates by 0.6-2pp to 7.4-10% for the primary real estate market, and to 8.9%-10% for the secondary real estate market.

The deposit has also been reduced by 5pp to 15%. The lowest mortgage rate at 7.4% is only for selected real estate projects that are partnered with Sberbank.

The government is trying to encourage homeownership, as it has a social cohesive effect and dulls the desire to protest.

The state was supporting mortgages by subsidizing rates over 12%, but withdrew this program earlier this year after the average mortgage rates fell below the 12% mark.

Sberbank has been leading a trend of aggressive rate cuts, partly to support the government policy, but also as mortgages are now the most lucrative credit business and the state-owned retail giant enjoys considerable advantage from lower borrowing costs.

“The news is definitely positive for real estate developers rather than Sberbank, with the announced rates at their lowest historical levels,” Aton said in a note.

Residential real estate in general has been growing this year on the back of strong demand and rising real income levels.

A recent survey found that Most Russians (66%) would like to live in a private home, according to the state-owned pollster, the Russian Public Opinion Research Centre (VTsIOM).

"Two thirds of citizens (66%) would like to live in private houses, this share exceeding 50% among residents of all types of houses. In fact, at present, half of them live in their home (34%), "the report says.

More than 57% of those surveyed believe that the building would not be older than 7 years for their life. Every fifth respondent wants to have an apartment in a multi-storey building (17%). The majority of Russians consider children's playgrounds (84%), parking spaces (71%) and grocery stores (66%) to be an essential element of the infrastructure of a modern apartment building. At the same time, 50% of Russians believe that they live in a house that is in satisfactory condition, every third (34%) of respondents said that their home is good, and 16% of respondents rated it as bad.