Azerbaijan should allow citizens to use part of their pension capital to buy a first home, a real estate valuation industry representative has proposed.
The measure could help prospective buyers cover an initial mortgage payment, although experts disagree over whether pension capital should be used before retirement, according to Vesti Baku.
Vugar Oruj, chairman of the Azerbaijan Society of Appraisers, said people who can afford monthly mortgage payments may still struggle to accumulate the down payment required to purchase an apartment. Allowing them to direct part of their pension capital toward the purchase could ease that barrier, he said.
Economist Warns Pension Capital Is Not a Bank Deposit
Economist Khalid Kerimli offered a different view, saying pension capital under the current system is used to calculate future retirement benefits and is not a freely accessible personal bank deposit.
He said Azerbaijan’s pension system operates on a solidarity principle: current social insurance receipts finance present pension payments, while the state budget covers shortfalls. Recorded pension capital is indexed to protect its value against inflation.
Private Pension Funds Could Offer More Flexibility
Member of parliament Vugar Bayramov said private pension funds could provide citizens with greater flexibility in using accumulated savings before reaching retirement age.
The proposal remains under discussion. No legislation, eligibility rules or limits on how much pension capital could be used for housing have been announced.
Source: Vesti Baku. Watch the original report.