Property development loans grow moderately in 2024 Q4 due to repayments at year end
The property development loan portfolio gained 2% in 2024 Q4 after a 9% increase in the previous quarter. Although banks were actively financing ongoing projects, the growth of the portfolio slowed down, as developers commissioned a large number of residential properties at the end of the year and repaid their outstanding loans using funds released from escrow accounts.
Since significant amounts of funds were released from these accounts, balances in them dropped by 8% to ₽6.4 trillion in the fourth quarter. The coverage of outstanding development loans, including new ones, with escrow account balances dropped by 8 pp to 72%. As a result of these changes and the overall growth in market interest rates, the average rate on property development loans rose to 9.4% per annum but was still significantly below the market interest rate.
More details are available in the review Project Finance in Housing Construction in 2024 Q4.