In the nearest future the residential housing market in our country will become much safer for consumers. Transition to project financing is a huge step forward. We did not reinvent the wheel, we just looked at how this works on other markets. In the UK, for example, in order to buy an apartment during the construction stage, prepayment of 10% of the total cost in needed. The rest is paid after the construction is completed, and warranties from bank and insurance company are obligatory. The same mechanisms are used in India and Canada — Alexander Ivlev, CIS Managing Partner, Deputy Regional Accounts Leader for Central, Eastern and Southeastern Europe & Central Asia, EY.
For us, the transition to new market regulation rules using escrow accounts will be fairly painless. When we made calculations for almost each project that our company is implementing and put them through indicative offers of different major banks that offer working through escrow accounts, we saw that the financial model is improving due to reduction of loan debt burden — Maxim Sokolov, Chief Executive Officer, Chairman of the Board, LSR Group .
The mechanism of project financing, of escrow accounts was in the first place designed to protect citizens – that was the task set by the President, and this mechanism does this. But the main thing is that this mechanism is functional, favourable for business and for developers. It provides guarantees for project financing. It is lucrative for banks; we can already see that it is one of the major segments of bank crediting. Now around 600 billion roubles from banks are involved in construction, and in the next 3–4 years this figure will reach approximately 7 trillion, which is more than a tenfold growth — Artem Fedorko, Chairman, Bank DOM.RF.