By Nigar Orujova
Housing is a sore issue for many families in Azerbaijan. Some solve this problem by living with relatives, others rent or take mortgages. All, however, are expecting change - a decrease in prices.
Prices in the real estate market have remained stable in Azerbaijan for a long time, while many people have been waiting for them to drop since the devaluation of national currency in February.
The expected increase in the volume of mortgage lending may lead to a revival of the real estate market, believes Elnur Asadov, the executive director of the public association Property Market Participants.
“Operations on purchase and sell in the real estate market of Baku were held mainly at the expense of mortgage loans. However, recently banks have stopped issuing loans to buy housing, so the right conditions are established at the real estate market.
“I believe that the expansion of mortgage lending, which is projected to reach 250 million manats ($238 million) until the end of the year, will contribute to the revival of the real estate market. The market is waiting for the resumption of mortgage lending, which should begin within 15-20 days,” he said.
In general, Asadov said, due to a break in the mortgage lending, the situation continues to be calm in the country's property market, which is reflected in the prices.
“The stagnation of the real estate market of the country continues. This has led to a decrease in housing prices, albeit slight, affecting mainly real estate prices in the outskirts of Baku. Throughout the country, property prices fell by five to seven percent. The number of purchase and sell transactions has also reduced. In August only, the number of operations on the purchase and sale of property through notary offices decreased by 15-20 percent compared with the same period last year,” the executive director said.
Asadov further said the monitoring revealed a slight revival in the rental housing market, which is associated with the placement of students coming to the capital from the regions of Azerbaijan in early September.
“Usually, since August, there has been some recovery in the rental market, which continues until the end of October. This is due to the influx of the students arriving in the capital from the regions of the country. However, the prices in the rental market, compared with last year increased by five to six percent. This is because property owners who want to sell it cannot do it for a few months. Therefore, they are forced to withdraw their properties on the rental market, and, raise prices wanting to get at least some benefit,” he said.
In general, Asadov said the price of rented accommodation -- depending on the location, condition, and area -- vary within 150-700 manats (about $140-660).
Earlier, the consulting company Value and Sources released a number of reasons why an apartment in Baku is not getting any cheaper. According to the company, the existing conditions are adversely affecting the revenues of the few buyers who wish to purchase a house for cash. Another reason is the lower interest rates on dollar deposits.
The company also named other reasons for the stable prices, such as the overall situation in the banking sector and reduced confidence in houses under construction. Thus, stagnation leads to the stability of prices in the housing market.
Real estate has always been considered a reliable investment instrument to preserve and increase capital not only for Azerbaijanis, but also around the world. The relative stability attracts more people to invest in the market.
