The most vulnerable place for those who want to have a house in Azerbaijan is mortgage loans. Because with apartment prices rising, people can’t pay cash and own a home. A mortgage gives them this opportunity. In recent years, a large part of home sales in the country are made through mortgage loans. In particular, there is great interest in social mortgages. One of the main expectations is related to the reduction of interest rates on social mortgage loans. Deputy Minister of Youth and Sports, Farhad Hajiyev, during his speech at the Young Families Forum, stated that it is desirable to lower the interest rates on social mortgage loans. But for this to happen, banks would have to be interested as partners. “We should try to make the conditions of preferential loans to families more flexible,” said the vice minister.
But I wonder to what extent reducing interest on social mortgage loans is realistic. If this happens, how could it affect the real estate market?
“Caspian” The newspaper published an article on the subject.
We have to wait until 2025.
Real estate expert Mulkadar Rustamov believes that lowering interest rates on social mortgages may be realistic: “The state should simply reach a compromise. Banks should be recommended to apply a discount to certain categories of people, to Privileged people. Like the four percent discount to individuals. In this way you can give a discount to other people. But in the best case you have to wait until January. It must be taken into account that the limit has not been reached. changed since four years ago.
M. Rustamov stated that it is important to increase the limits. Because the situation on the real estate market is very different from four years ago: “In the last four years, the price of apartments on the real estate market has increased by 40 percent. People cannot own an apartment with a limit of 100,000. In the minimum case, the limit should be 200,000. Only in this case will the people who obtain a preferential mortgage know about it.”
It will have a positive effect on the real estate market
According to Rustamov, if interest rates are lowered and limits are increased, this will have a very positive effect on the real estate market. The reactivation of the real estate market will begin: “The situation in the real estate market has stagnated a lot this year. Let us keep in mind that the stagnation of the real estate market affects all areas. We hope that in January 2025 the Mortgage Fund will change about increasing the limits because Currently in the real estate market, every 10 Seven apartments are sold with a mortgage.
“A lower interest rate is impossible”
Economist Elchin Rashidov does not think like a real estate expert. According to him, the interest rates on social mortgages are quite low: “The current interest rate is even lower than the inflation rate. The alternative value that will be obtained is also low. It is impossible to present a lower offer. It is also not possible Economically viable. The effects this will create on the real estate market are also destructive.”
According to E. Rashidov, if interest rates fall, prices may rise even more due to the activity of the real estate market: “A certain group of people belongs to the social mortgage. If interest rates fall, their problem will be But for For other people, apartments will become even more unaffordable because of the use of mortgages “as more people can afford them, prices go up and people who do not have this privilege find themselves in a more difficult situation. “A step like this can damage our economy.”
70 percent of those who buy a house with a mortgage are young
For your information, the granting of mortgage loans is regulated by the “Rule for granting mortgage loans, including preferential mortgage loans, from the funds of the Mortgage and Credit Guarantee Fund”, approved by decree of the President of the country dated June 22, 2016. According to the rule, the maximum amount of mortgage loans and the upper limit of annual interest rates are determined by the Council of Guardians of the Fund based on the analysis of the socio-economic situation of the country, taking into account the average parameters of the formed mortgage. portfolio and other economic indicators. 70 percent of the people who have improved their housing conditions thanks to the fund are young people. More than 35 percent of mortgage loans provided in accordance with the requirements of the Fund are preferential mortgage loans provided to special categories of persons in need of state support.
In general, in world experience, the main objective of the implementation of housing financing mechanisms operating with state support is to support the state social housing policy, to provide support to people who have the ability to pay, whose personal savings are sustainable and stable. , but not enough to buy a place of residence, and who mainly belong to the low and middle income group who provide access to affordable housing through long-term loans. For many years in our country, with the support of the State, mortgage loans have been offered to the population under conditions different from those of the market, and access to mortgage loans is guaranteed to the low- and medium-income population. Currently, the maximum annual interest rate for mortgage loans provided at the expense of the Fund is eight percent, but as a result of the competitive environment created among authorized banks, the average interest rate for mortgage loans is 6.12 percent. percent and the demand for The down payment on the loan starts from 10 percent. The maximum amount for ordinary mortgage loans is 150,000 manats, the maximum term is 300 months, the annual interest rate is eight percent, the maximum amount for preferential mortgage loans is 100,000 manats, the maximum term is 360 months and the annual interest rate is four percent.
