Ruble fall affects dynamics of real estate market in Azerbaijan
The depreciation of the Russian ruble has affected the real estate market activity in Azerbaijan, CEO of MBA Group consulting company Nusret Ibrahimov said.
He said that in late spring-early summer 2014 there was a recovery in the real estate market of Azerbaijan. "We had a large flow of capital from Russia into our real estate market, but by mid-summer, this flow stopped, and today we see a downturn of activity on the market. Thus, we can say that the devaluation of the ruble has had some impact on the activity of our market," said Ibrahimov.
This situation also affects the prices of the real estate market. "The decline is observed, but it is much slower than the decrease in activity," said the expert. "The activity on the property market in the second half of the year fell by about 30-35 percent compared to the first half. The dynamics of prices is unstable, in one month, we witness a decline in prices by 2.5-3 percent, in the other, we see the growth by 1 or 1.5 percent. That is, the trend is still towards small decline."
He said that the fall of the ruble had an impact on the flow of Russian investments. "At the beginning of the current and last year there were a number of appeals about the investments from Russian real estate market to Azerbaijan, but since March of this year, they have practically stopped," said Ibrahimov.
The Russian ruble this autumn is experiencing a round of decline amid geopolitical risks and falling oil prices. The weakening accelerated after the announcement by the Bank of Russia on the reduction of the currency interventions since November, 5 that was perceived by the market as sending the ruble to freely float. As a result, the ruble updated historical lows three days in a row.
The official euro exchange rate to ruble as determined by the Central Bank of the Russian Federation on Nov.12 is 57.0494 rubles, the dollar rose to 45.9520 rubles.