Affordable Housing to the Needy
It turns out our Government is really concerned with demographic issues of aging Armenia, and to contribute to its solution, has developed a national program. At yesterday’s parliamentary hearings representatives of the Parliament heralded that conditions of the “affordable housing for a young family” program has considerably been smoothened and after confirmation it’ll be easier for the families to solve their housing issues.
Artem Asatryan, Minister of Labor and Social Affairs, is sure that year after year the situation will improve. According to him, in case of confirmation and development of the program average salary will be sufficient to provide minimal conditions for housing. Draft bill to the program has already been submitted to the Government, and after wider public discussion, it’ll be sent to the National Assembly for confirmation.
The thing is, as per last year 1836 young families enjoyed the housing program. Many of them, who really need an apartment, weren’t able to become beneficiaries due to age limit, husbands should be until 30, however, now young people get married later, or a prepayment was demanded—in the regions at least AMD 1.6 million, in Yerevan—AMD 4.8 million, which very often was unsolvable for the young people, facing unfavorable working conditions nowadays. The new program offers to decrease prepayment or totally eliminate that demand, and raise the age limit. Thus, authors of the program have hope, in case of solution of housing issue, many families won’t strive to leave for abroad and, at last, in Armenia situation with birth will improve, as well as housing secondary market will be boosted.
A commission will be formed for program implementation, headed by RA Prime Minister, which will implement assessment of needs of citizens applied for counting. Vanik Babajanyan, Head of the Department of Demography of Labor and Social Affairs Ministry, informed, that families, which don’t have a residential space upon right to property or didn’t alienate the residential space belonging to them 5 years before the day of submission, live in emergency housing, cellars, temporary housings, with their relatives or kin, rent an apartment, as well as those having a residential space, but for every family member less than 9m2 space is allocated, or besides husbands, there are different sex children above 9, living in one room. Five subroutines with different terms have been developed for Yerevan and regions:
1.Allocation of a newly constructed apartment or that of purchased by an authorized body of real estate market with AMD 10 million maximum price, mostly refers to regions, monthly payments will comprise AMD 28 thousand.
2.Allocation of a newly constructed apartment or an that of purchased by an authorized body of real estate market with maximum cost of AMD 15 million, in case of which a trilateral agreement is signed for a 10-30 year term between the state, enterprise and a person, monthly payment comprises AMD 73 thousand.
3.Alloction of a prefabricated apartment by the authorized body, with a maximum cost of AMD 10 million, in case of which the enterprise purchases or imports total constructions for the prefabricated apartment, constructs it, and monthly payment comprises AMD 28 thousand.
4.Beneficiary himself/herself purchases an apartment, and the state subsidizes some part of mortgage interest rate—from 12% to 2%, i.e. for beneficiary annual percentage rate of mortgage credit comprises maximum 10%, maximum price for the apartment should be AMD 15 million. Monthly payment will comprise AMD 73 thousand, income tax of the beneficiary will also be directed to credit repayment.
5.Allocation of apartments belonging to RA communities upon the right to property, in case of which the apartment is allocated free of charge to the person in need. However, in case of not living there for 6 months it’s taken back by the authorized body and allocated to another family. And after 10 years of living after allocation, the family becomes its rightful owner.
“The state will be able to cover the expenses of 1900 families by AMD 1 billion,” V.Babajanyan stated.
Noteworthy enough, beneficiaries of the program deal with the state and not banks. If the person fails to implement payments under the agreement, then he/she may continue living in the apartment and after the contract finishes, yet in a 6-month term pay cost of the apartment, and become its owner.
What kind of apartments will be allocated within the program in Yerevan, or to which extent it’ll boost real estate market, Hakob Baghdasaryan, President of “Akcern” Corporation, stated that in case of the capital it may refer to 1 or 2 rooms apartments in the suburbs. According to him, on the whole, it’s a positive approach, however, on account of the fact that number of mortgages annually reaches 2000, and about 100 thousand apartments are sold, by percentage is rather little and radius of impact on the market is rather narrow.
“In developed countries 99% of apartments are purchased by a mortgage. For instance, in Czech Republic interest rate of mortgage is 1.9%, and even if a person doesn’t need an apartment, in case of allocation for renting may obtain 4-5% income and pay off interest rates, which is quite beneficial,” H.Baghdasaryan said.
In any case, according to him, the program facilitates purchase of apartments, “I consider, our main issue besides high interest rates and short terms, type of allocation is very complicated, connected to the condition of high salary. With AMD 128 thousand you may only purchase a small apartment. The biggest stimulating factor may be reduction of prepayment, as under 50% prepayment people aren’t able to pay that much amount, and under the new conditions even fiscal administration won’t hinder.”
By Gayane Khachatryan
