In the third quarter of this year in Azerbaijan the conditions for mortgage loans continued to be stricter.
The “Report” reports that this is indicated in the “Research on credit activity” of the Central Bank of Azerbaijan (CBA).
According to the information, the tightening occurred in mortgage loans granted at the expense of the banks’ internal resources:
“There have been no changes in the standards of mortgage credit granted to the Mortgage Credit and Guarantee Fund (IKZF) account. Banks expect that there will be no changes in the credit standards for both loans granted to the İKZF account and domestic mortgage loans in the next quarter.”
According to the survey, demand for mortgage loans decreased in the third quarter. According to respondents’ responses, the main driver of the decline in demand was domestic mortgage lending. Banks pointed to rising interest rates as a factor in the decline in demand. According to banks’ expectations, demand for mortgage loans will increase in the next quarter due to the massive sale of apartments within the framework of the State Housing Construction Agency’s projects in the region.
According to the banks’ responses in the survey, the capital and liquidity situation of the banks were the factors that had a restrictive effect on credit standards for mortgage loans. Compared with the previous quarter, banks’ liquidity situation had a greater impact on credit standards, the survey noted.
It should be recalled that in January-October of this year, 383.1 million manats of credit were granted through the Mortgage and Credit Guarantee Fund. This is 7.9% more than the same period last year. During the reporting period, the amount of loans refinanced by the Fund increased by 4.4% to 378.8 million manats.
