Review of Construction sector in Azerbaijan (January-May 2015)

The construction work volume decreased by 16.49 percent and hit 2.43 billion manat in Azerbaijan in January-May 2015 compared to the same period of 2014, according to the Azerbaijani State Statistics Committee.

Some 65.9 percent of the total volume of construction work accounted for primary construction, reconstruction and expansion, 17.1 percent - overhaul, 4.5 percent - current repair and 12.5 percent - other construction work.

According to the Azerbaijani State Statistics Committee, around 134,250 square meters of housing were commissioned in May 2015 compared to 121,760 square meters in the same period of 2014.

Around 723,780 square meters of housing have been commissioned since early 2015 or by 16.24 percent more than in the same period of 2014.

According to MBA Group consulting company, the supply on Baku's commercial facility market in May reduced by 11.5 percent. Some 156 facilities were proposed on the market compared to 177 facilities in April.

The exposition term of such facilities increased from 199 to 216 days. The average price per square meter in a non-residential facility in May hit $3,418 compared to $3,618 in April. The prices decreased by 5.53 percent compared to the previous month. The prices in manat increased by 2.46 percent compared to the same period of 2014, while the prices in dollar increased by 23.33 percent.

Primary housing market

The average cost per one square meter on Baku's primary housing market was $1,106 (1,159 manat) in May or by 3.75 percent more than in April. The prices in manat increased by 3.76 percent.

For comparison, the price per one square meter on Baku's primary housing market was $1,066 (1,117 manat) in April 2015.

Most of supply on the market relates to the economy-class apartments (up to $ 1,000 per square meter) and middle class ($1,000-$1,600). The share of apartments in this price range is 52.6 percent and 37.5 percent of the total portfolio of supply. The average cost per square meter in these apartments is $766 and $1,200 respectively. The share of apartments worth more than $ 1,600 per square meter is 9.9 percent. During the reporting period, the average price on the apartments of this class was $ 2,145 per square meter.

Last month, most of the supply on the primary housing market was fixed in Nasimi, Khatai and Yasamal districts of Baku. Some 63.9 percent of the entire supply account for these districts.

Thus, 33.5 percent of housing put up for sale on the primary market accounted for Yasamal district of Baku, 21.3 percent - Nasimi district, 9.1 percent - Khatai district, 7 percent - Narimanov district, 4.3 percent - Nizami district, 6.5 percent - Absheron, Binagadi districts, 2.6 percent - Sabunchu district, 1.3 percent - Surakhani district, 7.8 percent - Sabail district.

The average area of ​​apartments offered in May increased by 0.2 percent up to 119.45 square meters compared to April. The average area of ​​one-room apartments was 55.41 square meters, two-room - 88.57 square meters, three-room - 134.2 square meters, four-and five-room - 186 and 250.6 square meters.

The average price per square meter on the primary housing market in Baku's districts is as follows:

Secondary housing market

According to MBA Group consulting company, the average cost per square meter on Baku's secondary housing market reduced by 3.49 percent in dollars in May 2015 compared to April, reaching $1,630 and 3.47 percent in manat - up to 1,709 manats.

For comparison: the price per square meter on Baku's secondary housing market in May 2014 amounted to 1,770 manat ($1,689).

The decline in prices can be explained by the weakening of the population's purchasing power.

The supply on the secondary market of Baku decreased by 9.4 percent.

There were 1,726 offers in April. But the supply decreased up to 1,564 in May. The supply decreased by 25 percent compared to the same period of 2014.

The supply was mainly registered in Yasamal, Nasimi, Narimanov districts of Baku. Some 55.3 percent of total supply accounted for these districts.

According to the report, most of the sales portfolio on the secondary market of Baku in May accounted for the houses worth up to $ 1,500 (at an average price of $1,217) per square meter. Some 41.2 percent accounted for them. The apartments varying $1,500-$2,000 per square meter (the average price - $1,735) accounted for 41 percent of a total sales volume. The rest part (17.8 percent) accounted for the apartments, where the price per square meter exceeds $2,000 (the average price - $2,348).

The most expensive apartment on the secondary housing market was fixed on Nizami street in May - a three-room apartment (72 square meters) worth $331,200, the cheapest apartment in a new building in Khirdalan (78 square meters) worth $ 685 per square meter, the statement said.

The average market prices per square meter in Baku's districts in May 2015 are as follows:

According to the index of activity, Khatai, Yasamal and Narimanov districts were the most active districts of Baku in May. During the reporting period, the price index on the secondary housing market decreased by 0.26 points up to 7.24 points.

Commercial real estate market

According to MBA Group consulting company, the number of commercial facilities put on sale decreased by 11.5 percent in Baku in May 2015 compared to the previous month.

Around 156 commercial facilities were put on sale in May, while in April the number reached 177.

The number of commercial facilities put up for sale reduced by 42.95 percent (223 in May 2014) compared to the same period of last year.

The major share (38 percent) of commercial facilities put up for sale accounted for "vacant land plots" (a type of sites which can be used as an office, a shop and other purposes), 28.3 percent - the service facilities, 15.2 percent - shops, 10.9 percent - offices, 7.6 percent - basements.

An average area of non-residential facilities was 146.47 square meters or by 24.6 percent less compared to the previous month.

The largest land plot in Baku was registered in Bakikhanov settlement, Sabunchi district of Baku - 900 square meters (a restaurant), the smallest land plot also in Khatai district - 19 square meters (an auto wash).

The fluctuations of prices and market activity in May increased the period of exposing the facilities put up for sale. Within a month the period of exposing non-residential buildings amounted to 216 days (199 days in April).

In May, the average cost of a non-residential area in dollars decreased by 5.53 percent, reaching $3,418 per square meter compared to April 2015. The average rent per square meter in April was $13.7.

The price index in May 2015 decreased by 22 percent compared to the same period of 2014, but by 5.5 percent compared to April.

Changes in prices on non-residential areas depending on the zones:

Construction material market

The companies engaged in building material production in Azerbaijan, produced goods worth 172.5 million manat in January-May 2015, or 17.6 percent more than in the same period of 2014, according to the Azerbaijani State Statistics Committee's report.

During this period, Azerbaijan produced 1.196 million metric tons of cement (a 7.7-percent increase versus the same period of 2014) and 77,200 metric tons of gypsum plaster (a 3.4-percent growth), the report said.

Azerbaijan also produced 451,700 metric tons of ready-mixed concrete (a 26.3 percent decrease), 94,800 metric tons of asphalt (a 31 percent decrease), 6,800 cubic meters of precast concrete building structures (a 51.4 percent decrease), 5,100 metric tons of processed marble, travertine, alabaster and items made of them (a 3.5 times growth).

The volume of construction work in Azerbaijan declined by 16.49 percent and amounted to 2.43 billion manat in January-May 2015 compared to the same period of last year, the State Statistics Committee reported. Some 65.9 percent of the total construction work accounted for the primary construction, reconstruction and expansion, 17.1 percent - overhaul, 4.5 percent - current repair, 12.5 percent - other construction work