TBC Group Chief Economist Otar Nadaraia declares, that the growing use of in-house installment plans in Georgia’s real estate market is accelerating sales but also creating financial risks.
Speaking on the program “Real Estate Prospect,” Nadaraia said that when buyers purchase apartments directly from developers rather than through banks, these obligations are not fully reflected in the financial system, increasing the risk of hidden debt accumulation.
“In recent years, in-house installment schemes have developed very actively. In many cases, buyers purchase directly from developers without banks and later gradually repay the amount, often eventually transitioning into bank mortgages. This model increases accessibility but also carries risks,” he said.
He pointed to foreign currency exposure and potential over-indebtedness as key concerns, noting that individuals may take on multiple obligations simultaneously that are not fully visible in the financial system. He also said mortgage lending is rising as buyers shift from developer financing to bank loans after project completion.
Nadaraia emphasized that real estate prices are closely linked to the exchange rate, estimating that a 10% depreciation of the lari typically translates into a 6–7% increase in property prices. He added that inflation is not the main driver of housing prices, which are more strongly determined by demand and supply dynamics.
Looking ahead, he said there is no clear basis for a decline in property prices unless significant shocks occur, such as sharp currency depreciation or major migration shifts. He also noted that mortgage lending continued to grow in early 2026, with banks issuing GEL 1.28 billion in housing loans in the first quarter alone, reflecting strong annual growth in both volume and value.
