New rules on rental housing will revive the market of new buildings

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-Is there a connection between these two decrees?

- If to approach from a legal point of view, both decrees are directed to completely different areas, which give impetus to the solution of two serious problems. We can say that these two decrees are not related to each other. Thus, one of the decrees is aimed at expanding and improving the capabilities of the Mortgage and Credit Guarantee Fund. Another decree is designed to solve the problem of registration of long-built multi-apartment buildings. However, from a technical point of view, there is a definite connection. Thus, the decree signed on January 25 deals with buildings built after January 1, 2013 and the use of apartments for rent of these houses with the subsequent obligation to sell the Fund. Most of these apartments have registration problems. In fact, market research shows that it will be difficult for the Fund to find such cheap apartments, since the offer portfolio is very limited. However, after the decree of February 19 until the end of the year, the capacity of the Mortgage and Credit Guarantee Fund to search for such apartments will be significantly expanded.

-That is, what will be the differences between the new mechanism for renting apartments from the hitherto existing mechanism of mortgage and preferential housing?

- One of the differences of the first mechanism from the second is connected with obligations. Rental obligations are easier and less expensive. At least in terms of prepayment, depending on the market value of housing, the difference is from two to 10 times, and maybe more. In addition, in the process of mortgage apartment for sale is looking for someone who takes a mortgage. Now the Foundation takes on this work. Here, renting an apartment gets rid of certain expenses; for example, payments to a real estate firm. Finally, even though the rules are not yet ready, the category of people who rent housing will be wider than those who take mortgage loans. It is likely that middle-income and low-income groups will benefit from this program.

-When projects on a mortgage and social housing began, it was told that they would be available to the majority of the population. However, later it turned out that these projects are not available to low-income families. How much will cost a new way to buy a house through rent and is it profitable?

- Partially, I agree with you about the inaccessibility in this matter, but we should not forget that at present in the entire CIS space, one of the most affordable mortgage conditions in Azerbaijan. At the same time, the government is certainly not interested in increasing the volume of problem loans in the mortgage program. For this reason, today, in my opinion, if we exclude the absence of a decrease in interest, mortgage is still one of the most optimal projects for our country. Probably in the near future, interest rates will be reduced to a certain extent. As for the question of how much an apartment purchased by the rental method will cost, then it is difficult to talk about it now, since the rules are still not ready. However, based on the primary information, I can say that it will be cheaper and more profitable than a mortgage option.

- There are opinions that these two decrees were issued with the aim of influencing the sale of illiquid new buildings, so that these buildings were sold and the market was set in motion. In your opinion, will the decree on simplifying the permit for operating multi-family buildings affect the market?

- I do not like the assessing the issue this way, because of the decree of February 19 approximately 60 thousand apartments may be granted the right to property. Most of them already live, only now residents cannot use apartments as housing. For example, an apartment owner for 150,000 manat does not have the right to give someone his property, legally sell it, register there, and give it on bail. The owner is deprived of all this. In addition, more than 93% of the living space sold within the framework of a mortgage project within one-year are apartments. In numbers, this means slightly more than 3,500. More than half of them are apartments in old buildings. In this case, by means of marked numbers, it is largely impossible to set the market in motion. However, in any case, it is natural that this process will increase the dynamics and have a positive impact on the market.

- Do you think these measures are sufficient to solve the housing problems of families deprived of their homes? What else needs to be done to make housing affordable for the population? What are the proposed mechanisms?

-To be objective, it is impossible to solve the housing problems of low-income families through implemented programs. In fact, the noted programs are commercial projects that rely on execution mechanisms with certain benefits. However, it cannot be said that these programs exhaust the government"s solution to housing problems. However, there are houses built for veterans of Karabakh and war invalids of various social groups. It should also be noted. In any case, I think that the expansion of such programs will gradually lead to the implementation of more accessible projects.