YEREVAN, May 3. /ARKA/. Armenia’s Central Bank has recorded signs of “overheating” in the local mortgage market, Chairman of the Central Bank Martin Galstyan said today. According to him, 36% growth was registered in mortgage lending last year.
The head of the Central Bank said that real estate prices and mortgage lending showed similar growth trends, exhibiting complementary behavior.
According to the regulator’s data, new mortgages loans in Armenian drams account for 70-80% of all such loans.
Galstyan said in order to respond to the mortgage market risks in the most efficient and targeted way, the Central Bank introduced a more stringent LTV requirement, which is widely used in international practice: a higher LTV level was set for foreign currency mortgages (90% for AMD mortgages and 70% for FX ones).
Director of the Central Bank’s Macroeconomic Department Armen Nurbekyan, in turn, said that currently the Central Bank does not see decline in the mortgage market and both demand and supply in the construction market remain high.
According to Galstyan, the ability of banks to absorb risks has also improved, in particular, both capital and liquidity buffers have grown.
“Significant growth of currency liquidity is indicative, resulting not only from the 2021 perfromance, but also from targeted the long-term policy of the Central Bank,” he said. -0-
