Azerbaijan, Baku, Sept. 18 / Trend A. Akhundov /
Activity is expected to be observed in the property market in Baku in 2013, MBA Group General Director Nusret Ibrahimov said.
"The population's income will increase," he said. "The conditions of bank lending are being simplified. The interest rates are being reduced. The terms of mortgage lending will be changed. All this must have a positive effect on the activity of the real estate market."
He said the delay in the decision on the new mortgage lending in Azerbaijan have a negative impact on the activity in this area.
"The Azerbaijani Central Bank (CBA) observes the dynamics and trends of the market and changes the project," he said.
An analysis of recent data shows that the upper limit of a mortgage loan worth 50,000 manat does not correspond to reality compared to the current prices.
"This limit may increase," he said. "Moreover, the share of new buildings in the portfolio of mortgage loans is very low. The conditions for purchase of apartments in new buildings under the mortgage loan may be mitigated."
He added that it is unknown how a new building and urban development code, which should start from early 2013, will impact the market.
"But it will impact the market," he said.
The maximum amount of a common mortgage loan through the AMF is 50,000 manat at the rate of eight per cent and a payback period of 25 years. Under the social mortgage it is 35,000 manat at an annual rate of four per cent and a payback period of 30 years. The initial payment under the social mortgage is 15 per cent, while for conventional loan is 20 per cent.
Preferable conditions are granted to members of families of war victims national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs, persons making special contributions to sport, as well as the military with at least a three-year service term. Each family having the right to such a mortgage loan can only use the chance once.
There are 26 authorised banks belonging to the Mortgage Fund, 19 insurance companies and 13 appraisal organisations all as participants in the mortgage market.
The official exchange rate is 0.7853 AZN to $1 on Sept. 17.