By Nigar Orujova
The real estate market is believed to be one of the safest during the financial and economic crises, and in Azerbaijan, it continues to attract attention while the oil prices still shake the global economics.
The low oil prices forced a number of nations, especially oil producing states, to devalue their currencies, which affected many spheres of the economy. Given the volatile markets, many experts advise to invest in real estate, while others suggest waiting.
Bulk of buyers, who purchase apartments in the primary market during the crisis, is those who seek to recover their depreciating savings. This helps the sector to keep some demand for housing. As a rule, potential buyers want to buy apartments as cheap as possible, and sellers to sell more expensive.
However, there exist several kinds of risk that are inherent in this sector of the market, including fear of protracted construction and bankruptcy.
The government of Azerbaijan has recently announced tax incentives that are expected also to positively affect the construction sector. Thus, it will be possible to pay simplified tax from this January, which will allow to reduce the tax burden, promote development of the construction sector, and increase financial capacity to complete construction, etc.
The country recorded rise in prices in the property market in 2007-2008, but starting from 2009 the prices fall. The downward tendency in prices continued at the secondary housing market in autumn 2015.
Rovshan Talybzade, an expert at the Real Estate Center said the studies showed that the secondary housing cheapened by 5.6 percent in November, that is 1,349 manats per one square meter.
The volume of concluded transactions also fell by 4 percent in November compared to October, he said, linking it with the decreasing number of mortgage loans.
Changes in macroeconomic indicators, decreasing volume of public revenues and purchasing power of consumers as well as processes taking place around the world, are the main reasons for the decline in housing prices, Talybzade believes.
Speaking about the situation in the real estate market after the manat devaluation, the expert noted that the rise in price of the dollar against the manat will not lead to higher prices in the market.
Conversely, prices of apartments will fall, he believes, as now the market records low purchasing capacity.
Experts believe today the prices are at the bottom, which means the high time for purchase.
Economist Seyfal Aliyev told echo.az that it has long been observed that in the availability of funds, crisis is the best time to buy property during the slide in prices.
“The crisis is good only because it provides the opportunity to buy when prices are at the bottom, there will be no second opportunity,” he said. “It is obvious that the one who buys the property today will win in a year or two.”
The economist summarizes that offers decline and soon there will be nothing to buy, and the rise in prices will also occur spontaneously and impetuously, while today there are possibilities to choose and bargain.
People always need their own housing especially the young families that cannot afford expensive apartments. This makes investments in the real estate as one of the stable one, as prices here do not fall dramatically.
However, Rashad Aliyev, an independent appraiser, noted that at the moment one cannot say that the purchasing power of the population has fallen markedly, as the majority of citizens kept the free capital in dollars, which means that the amount increased in manats.
He also said that there is a chaos of prices at the housing market, and noted that person who is well versed in real estate can take a chance and win. However, ordinary citizens who are not particularly versed in the specifics of the market, should better not hurry with the purchase of an apartment, and watch the situation.
The appraiser said prices for the residences have falling long ago in dollars. Meanwhile, the situation is not clear yet with the housing bought in manats.