Mortgage deals in Armenia drop twice in 6 months – newspaper

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Economy

24.08.2012, 15:16

The number of mortgage deals fell twice in Armenia within the second half of the year, according to the article published in Hayots Ashkharh (Armenian World) newspaper.

Mortgage deals in Armenia drop twice in 6 months – newspaper

YEREVAN, August 24. /ARKA/.The number of mortgage deals fell twice in Armenia within the second half of the year, according to the article published in Hayots Ashkharh (Armenian World) newspaper.

Total of 539 mortgage deals have been made in Armenia at the reported period against 1030 deals from a year earlier. In Yerevan mortgage deals dropped by 61%.

When the real estate market faced the crisis, the responsible structures tried to activate it through mortgage lending: however, the positive effect was temporary, the article says.

As a result, the role of mortgage lending significantly fell in selling/purchasing real estate. Within the first six months last year mortgage deals made up 24 % in the total real estate deals, and this year mortgage deals just amounted to 13%.Alienation of property deals have also slashed affecting drop in mortgage deals even more.

Another reason for that may be a slowdown in effective demand touched off by the state aid program, according to the newspaper.

Moreover, the number of mortgage programs beneficiaries may have slipped. Interest rates of mortgage loans are teetering within 12-18%. And mortgage loans at low interest rates are mailny given in USD. However, attracting foreign exchange borrowings is not very profitable due to ongoing USD strengthening.

Finally, no capital construction tendency is connected with the situation at the Armenian real estate market. Capital construction is the only sector of Armenian economy which is not reporting any activity.Within seven months the sector reported 5% slowdown. -0-

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