BAKU, Azerbaijan, October 4. Although mortgage lending has generally grown in recent years, the pace of increase has slowed in recent periods, the Central Bank of Azerbaijan (CBA) stated in its semiannual Financial Stability Report, Trend reports.
The report pointed out that although mortgage volumes have been on the upswing since 2020, the growth rates have hit the brakes since 2023, influenced by a mix of demand and supply factors.
“High increases in housing prices and rising average interest rates on new mortgage loans have tempered growth in demand. At the same time, the limited availability of mortgage loans through the Mortgage and Credit Guarantee Fund (MCGF) and banks’ financing structures restrict their ability to issue loans from their own funds,” the report said.
The report added that in the first half of 2025, the rapid rise in housing prices and higher average interest rates on new domestic mortgage loans contributed to a decrease in the housing affordability index.
The Mortgage and Credit Guarantee Fund of Azerbaijan (MCGF) is a public fund established in 2017 by the amalgamation of the Azerbaijan Mortgage Fund and the Credit Guarantee Fund of the Republic of Azerbaijan. The objective is to enhance living circumstances, establish an effective financing system for house construction, attract both domestic and international investors to mortgage lending, and facilitate access to funding for SMEs. MCGF provides financial instruments including credit guarantees and mortgage loans for this purpose.
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