Despite everything that happened to us in 2020, 2021 is a great time to buy real estate in Baku. However, there are nuances. Let's sort out how you should invest in real estate within the capital.
How did the year 2020 affect the real estate market?
The first wave of a pandemic and a general lockdown, then oil prices plummeted to a 10-year low of 19.33 a barrel. After that, our country defended its integrity in the war over Karabakh. The year ended with rumors of the epidemic’s second wave: unfortunately, the rumors were destined to become reality. In short, 2020 crushed all anti-records.
Such harsh conditions inevitably derailed the economy directly into a real estate crisis. The natural decline in demand for housing in 2020 directly affected the demand for real estate in 2021. Thus, the Central Bank of Azerbaijan reported a significant increase in mortgage lending. During January-February 2021, the total amount of loans for mortgage housing purchase approached an astonishing 60 million AZN, exceeding the level of 2020 more than twice. On the other hand, some banks provided an opportunity for mixed loans at a reduced interest rate. For example, VTB bank offered its users a rate of 16.9% per annum instead of the usual 18-23%. In fact, bank customers could bundle several loans into one and lower the overall rate, while getting extra cash.
Who Benefits from Buying Real Estate in 2021?
Buying a home during COVID can be a good idea if you:
- Have a steady income
- Work in a government job or other trustworthy position
- Have enough money for a down payment (banks are willing to accommodate)
- Have no current debt (good credit score)
Analysts say 2021 is the perfect time to invest in real estate. Here are a few reasons why you should consider it:
There has been a steady rise in prices. Over the past year, prices have risen an average of 5% globally, and in neighboring Russia, the figure is 8%. Forecasted growth in real estate can reach an estimate of 12-15% per annum. The lending market offers some of the lowest interest rates of all time. The global trend has not bypassed our country, perhaps that is why in the first two months of 2021 the mortgage and loan guarantee fund member banks have refinanced by 350% more mortgage-related loans.
Real estate investments require one little step: you can familiarize yourself with the options on the real estate website called Korter. The company is successfully selling new buildings, cottages, and villas in Azerbaijan, as well as in 10 other countries.
What real estate to invest in 2021
The real estate sector is booming in all areas; however, cottage towns in Baku and suburban real estate, in general, are rising the fastest. In the post-pandemic period, people are more likely to get away from a bustling city, get in touch with nature, and stay calm. This holds true for the summer and autumn seasons.
In addition, the increased level of supply in the real estate market has a positive impact on the number of potential houses, apartments, and villas, which makes the choice more interesting. While each family makes its own decisions about buying a home, weighing the pros and cons, it is worth saying that 2021 is a very favorable time to invest in real estate.