The expert named the reasons for the reduction in the share of installments in the primary real estate market

Since the beginning of 2024, the volume of installment payments for the purchase of housing in the primary market has more than doubled. This trend is related to several key factors, Oleg Gulevaty, president of the G3 Group development company, told Izvestia on June 18.

"Previously, many buyers considered installments as a temporary solution followed by a transition to a preferential or regular mortgage, but now this tool has become an independent product with more stringent conditions. For example, in some regions, the share of installments reached 75%, but developers faced a problem with the quality of their portfolio — many clients were unable to switch to mortgages, which led to an increase in delinquencies," he said.

In addition, developers have become more cautious about issuing installments. Now they are scoring customers, demanding life insurance and job loss insurance, which increases the cost of this product. In addition, interest-free installments in practice often turn out to be a hidden discount, since its cost is included in the price of the apartment.

"As for the risks for buyers, they are primarily related to the terms of the contract. Although the installment plan data is not transmitted to the credit bureaus, developers prescribe penalties for violating the payment schedule. For example, in case of delay, penalties may be charged, and in extreme cases, the contract may be terminated with the loss of the deposited funds," the expert added.

Despite the reduction in the share of installments, this tool will remain on the market, as it is in demand by a certain category of buyers. However, developers will strive to minimize their risks by keeping the share of such transactions within 20-30% of total sales.

In an unstable credit policy, installments may become less affordable, but they will not disappear completely, remaining an alternative for those who cannot or do not want to apply for a mortgage.

Percentage point: developers massively refuse installment payments for housing

Some of them have also begun to reduce the attractiveness of such a product to customers.

On May 29, Yulia Rykunova, co-founder and business development director of the M2 real estate ecosystem, told Izvestia that alternative deals have become a new trend in the Russian housing market. According to her, alternative transactions differ in a variety of participants, legal risks and payment methods. Mortgage-free transactions, which, against the background of high interest rates, are one of the drivers of the industry.