Beso Ortoidze, General Director of the construction and development company Arsi, declares that internal installment schemes are increasingly replacing mortgage loans in Georgia’s real estate market. Speaking on BMGTV, he noted that while mortgage lending has decreased, real estate transactions remain steady, a trend he has never observed in his 20 years in the sector.
According to the National Bank of Georgia, the number of new mortgage loans has fallen, but the total mortgage portfolio still grew by 3.3% this year, reaching GEL 2.8 billion. Ortoidze explains that stricter regulations, higher interest rates, and banks’ cautious stance toward the construction sector pushed developers to activate internal installment offers, which have become comparable to banking terms.
However, he warned of long-term risks. Unlike banks, developers are not financial institutions and cannot fully assess customers’ solvency, which poses risks for both businesses and buyers. Customers also face uncertainty, as developers’ financial stability is not always transparent, making installment deals less secure than bank-issued mortgages.
Ortoidze expressed hope that ongoing negotiations between the National Bank, commercial banks, and businesses will lead to a softening of lending restrictions. “If banks are allowed to expand their portfolios in construction, mortgage lending will regain its role and reduce reliance on internal installments,” he said.
