Stagnation in construction sector persists
Prices for construction materials have steadily
declined in Azerbaijan during the past three months, the first time
such a decline has continued in the past five years.
Prices continuously went down in the domestic market in October-December 2008, industry analysts said. The reduction continued into 2009.
Experts link the current reductions in prices of new home construction with this decline in construction material prices.
According to estimates, construction materials account for 47.3% in the per square meter cost of new buildings.
Along with price declines, activity slowed in the domestic real estate market late last year. Moreover, sales of construction materials have decreased three times.
As for profitability in the construction sector, the figure has gone down from over 30% to just 17%.
Overall, 2008 indicators show a sharp increase in prices - by 36% - being reported in the construction market in the first half of the year. In the second half of 2008 this tendency reversed, as prices went down 24% in response to the global economic downturn.
Prices continuously went down in the domestic market in October-December 2008, industry analysts said. The reduction continued into 2009.
Experts link the current reductions in prices of new home construction with this decline in construction material prices.
According to estimates, construction materials account for 47.3% in the per square meter cost of new buildings.
Along with price declines, activity slowed in the domestic real estate market late last year. Moreover, sales of construction materials have decreased three times.
As for profitability in the construction sector, the figure has gone down from over 30% to just 17%.
Overall, 2008 indicators show a sharp increase in prices - by 36% - being reported in the construction market in the first half of the year. In the second half of 2008 this tendency reversed, as prices went down 24% in response to the global economic downturn.
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