Mortgage loan is not claimed. What�s next?

Baku / 22.05.17 / Turan: Banks in Azerbaijan are resuming issuing mortgage loans to the population. This list includes PAŞA Bank, UniBank, Kapital Bank, AtaBank, Bank Respublika, Bank of Baku, Muğanbank, Yapı Kredi Bank, Xalq Bank, Bank BTB ", which opened a credit line for mortgages. The initial contribution for a mortgage loan, issued on a general basis, is 15-25%, and on a preferential mortgage loan - 15%.

However, potential borrowers wishing to improve their housing conditions remained indifferent to the proposals of banks. No appeals have been fixed regarding the design of a mortgage loan during this month, the press service of these organizations indicated.

The economic crisis in the country has caused not only to a decline in industrial production, trade turnover, but also to a marked reduction in the number of mortgage loans. Moreover, many banks have completely refused to issue this type of loans. According to the Central Bank, the volume of mortgage loans allocated through the Azerbaijan Mortgage Fund (AMF) in January-December last year amounted to just over one million manat, which is 65 times less than in the same period last year.

There are other statistics that illustrate the situation in this sphere. By January 5, 2017, 18,111 mortgage loans were issued in the country for the amount of 737,876,810 thousand manats. Last December, the volume of mortgage lending amounted to 7,074,390 manats for 114 loans. For comparison, 17925 loans for the amount of 729737.519 thousand manats were issued by January 2016.

As independent economist Vugar Bajramov notes, a noticeable weakening of interest in mortgage loans is due to a number of reasons and is mainly connected with the implementation of the project on social housing. First, citizens of a number of categories prefer social housing, because the conditions for obtaining such an apartment are softer than draconian requirements of commercial banks. Now, many young families are waiting for the launch of the electronic registration system for getting social housing. An important point is that you can choose the terms of payment - either a one-time payment or a soft loan.

"Secondly, there is a stagnation in the real estate market. People planning to buy housing on a mortgage scheme are waiting for further decline in house prices. Since 2014, a negative trend has emerged in the construction sector, which manifested itself in the freezing of construction projects and facilities, and the decline in property prices. In addition, forecasts on the cheapening apartments were also voiced. These expectations influenced the behavior of potential buyers, "Bayramov said.

The third reason is the client's credit history. A certain part of buyers who decided to buy a home for a mortgage, either have difficulties in paying out foreign currency loans or deferred loans. Therefore, they have limited opportunities to purchase an apartment on a mortgage. Equally important factors are a rise in price in the consumer market, a decrease in the incomes of families.

Both in the private and in the real sector of the economy, deep stagnation, accompanied by the closure of production, the reduction of staff, the reduction of salaries.

Expert in real estate Rashad Aliyev is also not so optimistic about the increase in the purchasing power of citizens and business activity in the country. According to him, this year the real estate market is not expected to reduce prices in manats. Last year was a failure in terms of sales in the real estate market. This situation can be traced after two devaluations: sales volumes for new buildings decreased, the total number of transactions and mortgage loans decreased. At present, new buildings are almost half empty.

The unstable situation in the national economy does not allow making unambiguous forecasts in this area. The situation on the real estate market will depend on oil prices, the state of the foreign exchange market and reforms in the country's mortgage program.-0--