Drop recorded in demand for mortgage bonds
By Vusala Abbasova
Demand for mortgage bonds in Azerbaijan, within the latest valuation at 5 million manats(over $4.7 million), met the volume of supply, according to the Baku Stock Exchange (BSE) statement on July 28.
This indicates decreasing demand for mortgage bonds from the Azerbaijan Mortgage Fund (AMF).
Previously, the demand for AMF securities under the Central Bank exceeded the volume of supply by several times.
The BSE reported that the claim in the amount of 5 million manats(over $4.7 million)was submitted at the price of 100.1333 percent of nominal value recurring up to November 21, 2024.
The State Committee for Securities of Azerbaijan Republic (SCS) registered the ninth issuance of bonds in the amount of 50 million manats(over $47.6 million), with value of 1,000 manats(over $950) each and 3 percent of interest yield in December 2014.
The proceeds from the mortgage bonds placement are directed at financing conventional mortgages.
The AMF maximum rate for a conventional mortgage is 50,000 manats(over $47,600) with an interest rate of 8 percent and maturity period of 25 years.
A 20-perecent down payment is required on conventional loans.
A borrower, however, can apply for a “social mortgage” for 50,000 manats(over $47,600) with an annual interest rate of 4 percent and maturity period of 30 years, for a down payment of 15 percent.
The AMF, which was established December 2005 and began to issue mortgage loans in March 2006, has granted 651.5 million manats(over $621.1 million) worth of mortgage loans since its inception.
AMF mortgage loans totaled 87.15 million manats(over $83.09 million) in 2014, 112.9 million manats(over $107.6 million) in 2013, 74.77 million manats(over $71.29 million) in 2012, 95.64 million manats(over $91.18 million) in 2011, 97.08 million manats(over $92.56 million) in 2010, 76.9 million manats(over $73.3 million) in 2009, 70.2 million manats(over $66.9 million) in 2007, and 5.6 million manats(over $5.3 million) in 2006.
Currently, 30 of the total 45 banks operating in the country are authorized to distribute bonds from the Mortgage Fund.
21 of Azerbaijan’s 27 insurance companies and 16 appraisal organizations participate in the mortgage market.
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