Housing prices to plunge to five-year low in February – experts
Prices for housing in Baku will plunge to a record
five-year low in February, local industry experts predict.
The Economic and Social Development Center has told AzerNews that the "unbelievable discount campaigns" announced by a number of construction companies are in response to plummeting prices.
These experts said that the "purchases and sales crisis" in the domestic real estate market has resulted from stagnation in the construction sector. This stagnation is occurring amidst the deepening problem of the sales of apartments, causing an acute shortage of cash among construction companies. Since most commercial banks stopped allocating loans, these firms essentially lack sources of funding other than proceeds from the sale of apartments. Currently, supply exceeds demand in the Azerbaijani real estate market, which is bringing down prices. Overall, recent drops in housing prices in Baku have been caused both by the global financial downturn and sharp decreases in world crude prices.
Prices for land in the Azerbaijani capital have dropped in December, as well. The Real Estate Market Participants public union explained this tendency both due to the financial crisis and seasonal factors. Thus, as a rule, a slowdown in property sales is normal in winter, which causes prices to be somewhat reduced. The decrease was mainly reported in areas around the city.
The greatest falls in prices was seen in the country`s regions. Housing prices dwindled 30-40% in the Zagatala and Balakan districts, 20-30% in Ismayilly and Shamakhi, and 10-15% in the south.
The group`s analysts linked the decrease to low demand fueled by the international economic crisis and a weaker demand in 2008 by Azerbaijanis living in neighboring Russia to buy property, compared to previous years. Additionally, the experts concluded that ongoing road construction in Azerbaijan has temporarily made travel more difficult to and from the country`s regions, which also contributed to a decline in prices.
The Economic and Social Development Center has told AzerNews that the "unbelievable discount campaigns" announced by a number of construction companies are in response to plummeting prices.
These experts said that the "purchases and sales crisis" in the domestic real estate market has resulted from stagnation in the construction sector. This stagnation is occurring amidst the deepening problem of the sales of apartments, causing an acute shortage of cash among construction companies. Since most commercial banks stopped allocating loans, these firms essentially lack sources of funding other than proceeds from the sale of apartments. Currently, supply exceeds demand in the Azerbaijani real estate market, which is bringing down prices. Overall, recent drops in housing prices in Baku have been caused both by the global financial downturn and sharp decreases in world crude prices.
Prices for land in the Azerbaijani capital have dropped in December, as well. The Real Estate Market Participants public union explained this tendency both due to the financial crisis and seasonal factors. Thus, as a rule, a slowdown in property sales is normal in winter, which causes prices to be somewhat reduced. The decrease was mainly reported in areas around the city.
The greatest falls in prices was seen in the country`s regions. Housing prices dwindled 30-40% in the Zagatala and Balakan districts, 20-30% in Ismayilly and Shamakhi, and 10-15% in the south.
The group`s analysts linked the decrease to low demand fueled by the international economic crisis and a weaker demand in 2008 by Azerbaijanis living in neighboring Russia to buy property, compared to previous years. Additionally, the experts concluded that ongoing road construction in Azerbaijan has temporarily made travel more difficult to and from the country`s regions, which also contributed to a decline in prices.
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