YEREVAN (RFE/RL)–A new structure designed to encourage buying and selling on Armenia’s shrinking property market has launched its active operations by signing its first deal on mortgage loan refinancing with one of the country’s leading commercial banks.
Armenian Central Bank Chairman Artur Javadian said the National Mortgage Company (NMC) established last month will eventually make commercial bank mortgages available at better terms to customers by providing their refinancing.
“You will see an abrupt decrease in interest rates,” Javadian told media. “We will give a priority to banks that tend to set lower interest rates.”
At present, the NMC possesses 17 billion drams (or about $46.5 million), of which 5 billion drams (or approximately 13.6 million) was allocated from the Central Bank and the rest is part of the package for Armenia’s banking system from the Russian $500 million stabilization loan disbursed last month.
The company’s managers consider it possible that new financial means will be attracted in the future.
The project enables citizens to receive a mortgage loan of up to 20 billion drams. (One dollar sold at about 367 drams at most exchange offices in Yerevan on Monday.)
According to the Central Bank, as compared to their level of last year, prices for apartments in Armenia have decreased by 7-10 percent in the national currency and by up to 30 percent if calculated in the foreign currency equivalent.
The head of Armenia’s Central Bank sees no prerequisites for any further fall in prices on the property market.
According to Javadian, commercial banks will be refinanced at 9 percent, while no restrictions will be placed on terms of mortgage loan allocations.