AZE.US
The volume of state-backed mortgage loans issued in Azerbaijan during the first six months of 2026 fell 2.8% from the same period last year.
The decline follows several years of nearly continuous growth in mortgage lending. However, experts say it is too small to cause a noticeable drop in apartment prices.
Vugar Oruj, chairman of the Azerbaijan Society of Appraisers, told Demokrat.az that reduced mortgage lending could affect housing demand and the expectations of people waiting for financing, but would not change the broader direction of the real estate market.
“A 2.8% decline is not significant enough to seriously affect the market,” Oruj said.
According to the expert, Azerbaijan’s Mortgage and Credit Guarantee Fund has issued approximately 60,000 mortgage loans since it began operating. Over the past decade, an average of about 6,000 apartments have been purchased through mortgage financing each year.
Mortgage-backed purchases account for only 7% to 8% of all housing transactions in Azerbaijan. As a result, a moderate reduction in state financing may weaken demand in part of the market but is unlikely to push overall prices down.
Oruj noted that each new allocation of mortgage funds usually generates a temporary increase in buyer activity. The additional demand can also contribute to higher apartment prices.
However, the impact of mortgage lending remains limited compared with other factors shaping Azerbaijan’s housing market.
The main drivers of apartment prices include rising construction material costs, higher wages in the construction sector, stricter building requirements, limited land availability, inflation and changes in the purchasing power of the manat.
Demand is also supported by the popularity of real estate as an investment and the limited number of alternative investment opportunities available to households.
Oruj estimated that state-backed mortgage lending accounts for no more than 5% to 6% of the factors influencing the overall housing market.
The 2.8% decline may therefore reduce the number of mortgage-financed transactions and make access to state-supported loans more competitive. But it is not expected to result in lower apartment prices across Azerbaijan.
AZE.US