AZE.US
Azerbaijan may increase the maximum amount available under its state-backed mortgage program as rising housing prices make it increasingly difficult for buyers to find homes within the current lending cap.
The maximum mortgage loan currently stands at 150,000 manats. The Mortgage and Credit Guarantee Fund said the limit could be reviewed if continued increases in property prices make an adjustment necessary.
The fund is also preparing broader changes intended to simplify access to subsidized mortgages, expand lending outside Baku and introduce digital technology into the application process.
Rasim Abdullayev, a senior manager at the fund, said more than 59,000 people have received mortgage loans totaling approximately 4 billion manats.
He said the fund had already simplified some eligibility requirements. Self-employed people registered under Azerbaijan’s simplified tax system were granted access to mortgage financing last year following legislative changes.
Further measures are now being discussed with relevant government agencies.
Easier Mortgage Rules for the Regions
Expanding mortgage lending outside the capital is among the fund’s priorities.
Mortgage activity in the regions currently equals approximately 23% of the level recorded in Baku. Most regional loans are issued in Sumgayit, Ganja and the Nakhchivan Autonomous Republic.
The fund says applicants in the regions are already assessed under more flexible income verification and underwriting rules than borrowers in the capital.
Officials hope the changes will make state-backed housing finance available to a wider group of households outside Baku.
Artificial Intelligence to Speed Up Applications
The fund also plans to integrate artificial intelligence into mortgage processing.
The technology could be used to verify documents, accelerate applications and reduce the number of certificates that borrowers must collect from government agencies.
The same digital tools are expected to be introduced into Azerbaijan’s rent-to-own housing program.
The long-term goal is to reduce paperwork almost entirely, minimize in-person contact with officials and allow government databases to exchange the necessary information electronically.
Housing Prices Rise Faster Than Incomes
The possible increase in the mortgage limit comes as property prices continue to climb.
Experts estimate that apartment prices in Baku and other major cities are rising by an average of 12% to 15% annually. The increase has placed additional pressure on buyers whose salaries no longer meet banks’ affordability requirements.
Monthly mortgage payments generally cannot exceed half of a borrower’s official income. As apartment prices rise, many applicants are either rejected, forced to seek smaller homes or required to postpone their purchase.
Housing specialists say increasing the mortgage limit alone will not solve the affordability problem. They argue that Azerbaijan must also expand the financial resources available to the mortgage fund and encourage greater competition among construction companies.
Without a larger supply of housing and changes to lending conditions, subsidized mortgages could become increasingly inaccessible even as demand continues to rise.
AZE.US