The National Bank of Georgia (NBG) simplified mortgage lending regulations to stimulate the real estate market.
According to some representatives of the real estate sector, easing lending regulations will have a positive impact on the market, however, it is unlikely that this mechanism will significantly increase apartment sales.
As the General Director of "Arsi" told BM.GE, simplifying regulations will make it easier for consumers to obtain mortgage loans in some cases, however, it is unlikely to have a significant effect on apartment sales.
"We need to observe what impact the easing of this regulation will have on the market, as we are not in a standard situation today. Interest rates on mortgage loans have already increased, and demand for real estate has decreased. Under these conditions, it's important to see how much the easing of this regulation counterbalances this situation. Demand and activity in the real estate market have decreased, but not dramatically. This decline is not so sharp as to constitute a deep crisis in the sector - there are fluctuations, but it's not a crisis situation.
Easing regulations on mortgage loans will, of course, simplify procedures. However, this is not the same kind of mechanism as the subsidy program during the pandemic when people bought real estate because of the subsidy. This is not the kind of mechanism that would make someone buy real estate and take out a mortgage loan. It will simply simplify the process - if in 1 out of 10 cases a consumer didn't fit within these regulations before, now they will fit and also take out a mortgage loan. Consequently, mortgage loan issuance will increase. However, the idea that someone would buy real estate because of this regulatory easing - that's not the case," - stated Beso Ortoidze.
