Russians have become more likely to sell their apartments in installments

In Russia, there has been a sharp increase in interest in installments for the sale of apartments not only in new buildings, but also in the secondary market, Regina Dydalina, executive director of the federal company Floors, told Izvestia on March 6.

"Every fifth property owner in Russia is ready to provide installments to buyers of his apartment or house in return for an expensive market mortgage. At the same time, its terms largely depend on the urgency of the sale, the installment period and the purpose of the sale. The most difficult thing is to decide on installments for those who sell in order to improve housing conditions, therefore, more often than others they offer installments not free of charge, but with an increase in the price of the object or interest accrual for its provision. In the current conditions of lending, it turns out to be much more profitable than a mortgage," she explained.

According to her, installments between individuals for the sale of residential real estate were popular in 2014-2015 against the background of an increase in the key interest rate, but as it decreased, this tool lost relevance.

"The market is gradually adapting to the high key interest rate and extremely expensive mortgages, and following installments in the primary market, the trend towards installments for the sale of ready-made housing has begun to actively develop. According to our estimates, since the beginning of the year, about 7% of the owners have sold with some form of installment plan," the expert said.

At the same time, Russian legislation has long had a mechanism for granting installments. In fact, it does not differ much from how apartments are purchased with the involvement of bank loans.

"The installment period is subject to an encumbrance upon registration, just like when applying for a mortgage. If the buyer violates the terms of the agreement, the transaction can be terminated by agreement of the parties with the return of funds to the buyer and the apartment owner. Or the seller has the right to recover the remaining amount of debt in court, including through the sale of the pledged object," explained Dydalina.

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The expert noted that with a prolonged period of high key interest rates and expensive market mortgages, the share of installments in the secondary market will grow and by the end of the year may reach 10-15% of total sales.

"Installments in the current conditions are beneficial both to sellers who are interested in the urgent sale of their apartments, and to buyers for whom they become a more affordable alternative to expensive mortgages, therefore in the near future the share of installment transactions in the secondary and suburban markets will only grow"- Dydalina summed up .

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