Gloomy mortgage crisis

From January to July, mortgage lending amounted to 62.2 million versus 64.2 million manat to July 1 last year. Thus all loans fell to the capital, said the central bank of the country.

According to the chief financial regulator, in the reporting period, the average size of a mortgage loan in the country amounted to 39 905.4 manat (to July 1, 2013 - 39,470 manat), with an average monthly payout 318.5 319.9 manat compared to last year. Slightly decreased and the average rate on loans – it was 6.88% and became 6.82%.

Obvious lag (minus 3.1%) growth is associated with high interest rates - 4% for social, 8% for "other" mortgage. For comparison - in the former socialist Czech average rate on mortgage loans is 2.95% per annum. And despite the fact that housing prices and other real estate in Prague quite high by European standards, and "fall" are not going to.

According to the economist Samir Aliyev, local banks, despite the excess liquidity is not going to reduce the margin in real estate transactions. This is due to the lack of real competition in the financial market and the weighted average market indicator. According to him, for the present state of the economy, even 8% per annum - a decent bet, because private banks, whether they will, it would double. But the population has no opportunity in droves to take mortgages on current conditions and the government, including the Central Bank must reckon with.

At the request of senior officials of the CBA, slow to explore the possibilities of the population has a view to maintaining a balance between the demand of the population covering security and preservation of the mortgage portfolio of banks. Recall from the beginning of funding by the AMF (from January 2006 to July 2014) was issued mortgage loans totaling 543.55 million manat. The size of a mortgage loan by the AMF is 50 thousand manat at a rate of 8% and a maturity of 25 years. Social mortgage is 50,000 manat at an annual rate of 4% and a term of 30 years.

The main reason for the underdevelopment of the mortgage is a high amount of down payment. Even for social mortgage (martyr families, National Heroes of Azerbaijan, internally displaced persons, civil servants with experience of not less than three years, and Ph.D., as well as persons with special achievements in sports and military service with a minimum period of three years), it is 15, for a conventional mortgage - 20%. That is, to get an apartment on credit value of 50 000, it is necessary to pay the bank directly from 7500 to 10 000. Are there many such apartments cost and how many people can afford it?

Major mortgage terms are as follows: loans are in manats Azerbaijani citizens mortgages may only be an apartment or private house, the amount of mortgage loan should not exceed 80% of the market value of the property, the monthly payment for a loan must not exceed 70% of the monthly income of the borrower. The presence of an agreement on life insurance is obligatory. Today authorized banks of the Mortgage Fund are 28 banks. Participants in the mortgage market are also 21 insurance companies and 11 appraisal organizations. - 17D-