Interest to new buildings grows in Baku
Fatma Babayeva
The quantity of new skyscrapers erected during the last decade in Baku makes the capital city lo look glamorous and more captivating. Statistics shows the number of people desiring to buy flats in new multi-apartment buildings keeps increasing compared to previous years.
Newly constructed buildings offer better services to owners than the old housings in the city. These buildings have been provided with all utilities and have well operating management systems.
Now most of the issues that previously used to create obstacles while purchasing an apartment in these buildings have been resolved. The mortgage requirements to purchase an apartment in such buildings have been simplified by the government as well.
The statistics show that price of the real estate increased by 40.3 percent in manat terms while dropped in dollar terms by 23.35 percent.
Despite the increase in real estate prices since the beginning of 2016, the average value of properties fell slightly on the monthly basis due to the activities in the market of commercial buildings, said Nusret Ibrahimov, the CEO of consulting company MBA Group on April 14.
The prices in the real estate market in Baku declined by 1.96 percent in manat terms (0.31 percent in dollar terms) during March, Ibrahimov emphasized.
The maximum decline was observed in the commercial property market during the last month. The prices fell by 8.55 percent in manat terms (6.23 percent in dollar terms) in March compared to the prices of February, he added.
Notably, the market of commercial buildings experienced conversely the highest growth compared to the beginning of the year. Real estate prices went up by 36.87 percent in manat terms (fell by 7.28 percent in dollar terms) since January.
Prices on the primary housing market increased by 1.41 percent in manat terms (3.98 percent in dollars) per month, and the cost of housing in the secondary market increased by 3.84 percent in manats (3.43 percent in dollars).
Since the beginning of the year, prices on both markets in manat terms increased by 20.65 and 0.3 percent respectively, but in dollar terms, they decreased by 18.27 and 30.24 percent respectively, Ibrahimov noted.
Furthermore, a slight decline was recorded in prices in the land market in manats terms. The prices of the lands decreased by 1.54 percent in manat terms over the month, and 1.34 percent since the beginning of the year. In dollar terms, it reduced by 30.31 percent for the given time period.
Ibrahimov thinks it is hard to forecast what will happen in the market next due to constantly changing situation.
If the real estate sector will attract additional investment, then it will activate Azerbaijan Mortgage Fund and the construction of social housings will start which in its turn, will revitalize the market and stabilize the situation. However, this will also cause an increase in the property prices. Otherwise, the market prices will fall, said the CEO of the consulting company.
At the same time, the development company AS Group Investment which has more than 10 years experience in the real estate sphere told that the interest in the real estate market of Baku is in favor of new building sector.
Particularly, buyers find new building which are under construction more attractive which is the main impetus for the whole real estate market.
In order to attract customers, building companies offer such a variety of mortgage products and installments, conditions and rates that neither old housing nor ready new buildings can offer the buyers, analysts of the company said.
According to the experts of AS Group Investment, mortgage products, short and medium-term installments that are offered today by the construction companies in the primary market of Baku increase the availability of the housing. It has a positive impact not only on demand but also on the cost of one square meter in new buildings (both in buildings that are ready and those under construction).
Unfortunately, the old housing cannot boast with such conditions since the buyer of such housing must comply with the dozen of requirements on the mortgage, added the company.
Experts of the company believe that in order to choose the optimal option on the market of new buildings that are under construction, the buyer needs deeply examine each offer existing in the real estate market.
Almost all companies offer a standard mortgage for 20 years with an initial payment of 10 percent and an annual rate of eight per cent.
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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva
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