Azerbaijan, Baku, June 27 /Trend, A.Akhundov/
Simplifying the mortgage lending in Azerbaijan positively affects the market activity, the director general of MBA Group consulting company Nusret Ibrahimov told Trend.
"Today, there are many families, especially young who really need housing and have the opportunity to take a mortgage loan. However, they can not collect the necessary documents, they have some problems. If the conditions are facilitated, then the market activity will increase," Ibrahimov said.
At present, a new strategy of the development of mortgage lending is being prepared, which envisages simplifying mortgage issuance in the country, the chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov said earlier.
"One of the considered directions is the revision of the maximum amount of mortgage lending, reducing interest rates and carrying out measures that will create conditions for the mortgage development in the country," he added.
He said that studies indicate that the current maximum loan size does not allow young families to buy apartments in new buildings, so they prefer housing in the secondary market.
"Mortgage lending terms will be revised to create conditions for youth in order to upgrade the housing stock," Rustamov said.
Ibrahimov said according to the rules in force today, buying an apartment in new buildings through a mortgage loan requires a copy of the act on permission for the construction of the new building that was received in local authorities, and financial information about how much a customer buys an apartment.
"Only two documents are required from the construction company. Despite what conditions are put forward, these two documents will be required. This is a very simple procedure, but some companies are afraid of giving this document, or some companies do not have it. I can not imagine how it is possible to further simplify the process," said Ibrahimov.
According to research, the consumers give preference to new buildings with a price of 500-600 manat per square meter. In April, the price in primary housing market of Baku has not changed compared to the previous month and amounted to 841 manat. As of the beginning of the year, the prices fell by 0.8 percent, compared to the same period of the last year - by 3.4 percent, compared with the crisis period (September 2008) - by 29.6 percent.
Under the AMF's terms, the maximum amount of the issuance of conventional mortgages in Azerbaijan is 50,000 manat, at a rate of 8 percent for 25 years. But the amount in the social mortgage is 35,000 manat, at an annual rate of 4 percent and a 30-year term. The initial fee for ordinary and concessional loans is 15 percent, for ordinary loans - 20 percent.
The Azerbaijani Mortgage Fund was established in September 2005 by an Azerbaijani presidential decree. Its charter was approved by a separate presidential decree in December 2005. The AMF's main purpose is to create funding mechanisms which provide home ownership to Azerbaijani citizens through long-term financing, and to attract domestic and foreign investment into mortgage financing.