Recently, many have been talking about the need for changes in housing finance – in particular, the introduction of escrow accounts and so-called project finance, which should make the market more transparent and secure.

In general, this model is the right way to go. Its implementation is a necessary and inevitable step, but it requires a realistic approach, taking into account current market conditions and the readiness of the financial system. Otherwise, the transition may result in the stoppage of new projects and higher housing prices, rather than the expected investor protection

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There are four main reasons for this (note that it is not necessarily about the project structure, but rather about the source and mechanism of funding)

Redistribution of risks

Currently, all risks are borne by the developer. In the case of loan financing, they would be transferred to the bank. The main risks are

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