05.Nov .2020 19:00

The 364 Million GEL Loan Was Approved by Subsidizing the Mortgage Loan

The 364 Million GEL Loan Was Approved by Subsidizing the Mortgage Loan
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According to the Government of Georgia, 364 million GEL loans were issued within the mortgage loan subsidy program framework until September. A total of 3,823 borrowers benefited from the program, according to the budget execution report.
The loan subsidy is designed to support the construction sector. Beneficiaries will receive co-financing of the loan interest for 5 years.
The terms and criteria of the program are as follows:
  • mortgage loans should be taken - from June 1, 2020, to January 1, 2021; State co-financing - 4%;
  • The state terminates the subsidy if the refinancing rate falls below 5% (renewed if it exceeds 5%);
  • Loan ceiling - GEL 200,000;
  • Co-financing will last for 5 years (from the signing of the contract);
  •  The state guarantees mortgage loans. The amount of the guarantee is 20%. Therefore the state is the co-borrower. The guarantee applies to loans where the co-payment exceeds 10%.
According to a report published by real estate consulting company Colliers, 3,121 residential transactions were recorded in Tbilisi in September, 11% more than the previous year. The total sales value is $ 134 million, which is an increase of 8% compared to the same period in 2019.
According to Colliers, 2,159 apartments were newly built in Tbilisi in September, which is 18% more than in September 2019, while the number of registered transactions in old apartments decreased by 2% to 962 units. At the same time, according to the report, the demand for economy class apartments increased by 32%, while sales of medium and premium segment apartments decreased by 29% in September. The increase in demand for apartments in this segment is likely due to the government-sponsored mortgage loan subsidy program.
Despite the increase in apartment sales in September, 18,537 apartments were sold in the capital in 3 quarters of 2020, which is 24% less than the same period in 2019.