Housing prices, demand down in Baku
Prices for apartments have dwindled in Baku amid
falling demand for housing, researchers studying the city`s real
estate market have concluded.
According to Nusrat Ibrahimov, an independent local expert, a 10 per cent decrease has been seen in prices for apartments for sale in the central Nasimi and Narimanov districts.
"Mainly, the tendency of price reduction is in evidence in the secondary housing market and in prices for land. This tendency is expected to last three to four months," said Ibrahimov, who heads the Real Estate Market Participants public union.
Ibrahimov noted, however, that a major drop is not occurring in prices for housing in the remote parts of Baku.
"There are vacant spaces in those areas and the apartments built there have a low cost-value. Therefore, consumers are more interested in such property," Ibrahimov concluded.
He added that a one-room apartment can be found for $40,000 outside the city center, while the average price for one-room apartments across the city is $60,000.
Further, Ibrahimov said that although properties have become more affordable, the purchasing power of consumers has not increased but, on the contrary, decreased by some 30 per cent in comparison with 2008.
He concluded that housing prices have yet to reach their acceptable level, saying that sliding purchasing power will continue affecting them.
Nonetheless, some of those engaged in constructing high-rise buildings are not predicting further falls in real estate prices across Baku. The manager of a Khirdalan-based construction firm, who declined to give his name, says the price per square meter of space in apartments located in central Baku may go down to $1,500, but a drop in prices for housing outside the city center is unlikely to take place. The manager believes that since prices for construction materials have not fallen, it will not be possible to find less expensive apartments in the domestic market any time soon. He mentioned, however, that if construction firms fail to repay loans borrowed from banks, these firms might go bankrupt, which could subsequently bring down prices for the apartments they previously built.
The Real Estate Market Participants estimated in its latest research that over 20 construction companies have recently gone out of business in Azerbaijan.
According to Nusrat Ibrahimov, an independent local expert, a 10 per cent decrease has been seen in prices for apartments for sale in the central Nasimi and Narimanov districts.
"Mainly, the tendency of price reduction is in evidence in the secondary housing market and in prices for land. This tendency is expected to last three to four months," said Ibrahimov, who heads the Real Estate Market Participants public union.
Ibrahimov noted, however, that a major drop is not occurring in prices for housing in the remote parts of Baku.
"There are vacant spaces in those areas and the apartments built there have a low cost-value. Therefore, consumers are more interested in such property," Ibrahimov concluded.
He added that a one-room apartment can be found for $40,000 outside the city center, while the average price for one-room apartments across the city is $60,000.
Further, Ibrahimov said that although properties have become more affordable, the purchasing power of consumers has not increased but, on the contrary, decreased by some 30 per cent in comparison with 2008.
He concluded that housing prices have yet to reach their acceptable level, saying that sliding purchasing power will continue affecting them.
Nonetheless, some of those engaged in constructing high-rise buildings are not predicting further falls in real estate prices across Baku. The manager of a Khirdalan-based construction firm, who declined to give his name, says the price per square meter of space in apartments located in central Baku may go down to $1,500, but a drop in prices for housing outside the city center is unlikely to take place. The manager believes that since prices for construction materials have not fallen, it will not be possible to find less expensive apartments in the domestic market any time soon. He mentioned, however, that if construction firms fail to repay loans borrowed from banks, these firms might go bankrupt, which could subsequently bring down prices for the apartments they previously built.
The Real Estate Market Participants estimated in its latest research that over 20 construction companies have recently gone out of business in Azerbaijan.
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