Azernews.Az

Housing prices in Azerbaijan have increased by 46 percent over the past five years compared with June 2020, Azernews reports, citing the Central Bank of Azerbaijan.

According to the CBA, prices in both the primary and secondary housing markets have been on the rise. While the real estate market remained relatively stable in 2020 due to the pandemic, subsequent years have seen clear upward trends.

In the first half of 2025, the increase in housing prices, along with higher average interest rates on newly issued domestic mortgage loans, contributed to a decline in the housing affordability index. At the same time, the positive dynamics in households’ disposable income kept the index above its benchmark level.

Open-source data on the housing market shows that by the end of June, the median monthly rent in Baku reached 883 manats, translating into a capitalization period of 22.5 years. The ratio of average housing prices to the average monthly nominal salary in Baku stood at 217 months, or 18.1 years.

Although investments in the construction sector have fluctuated over time, the share of financing directed toward residential housing within total capital investments has been growing. This trend has strengthened in recent years, contributing to higher market activity.

According to the report, the increase in residential construction investments has been driven by both strong demand and new projects initiated by the state and private sector.

“Overall, the recovery of investment flows, the large-scale construction and reconstruction work carried out in the country, and the ongoing process of legalizing undocumented housing by presidential decree are expected to keep activity in the construction and real estate markets at a high level,” the CBA noted.