The pace of construction work decreased in Azerbaijan as a result of negative trends in the development of the world economy, which had an impact on the country. Of course, it affected the volumes of production of building materials.
The support for the construction sector is envisaged today as part of anti-crisis measures implemented by the Azerbaijani government.
The actions are taken to create favorable conditions for the export of building materials.
An increased customs duty has been applied for the import of bentonite, gypsum, cement, clinker, as well as items made of stone, plaster, cement, asbestos (slabs, bricks, building blocks) and ceramics for at least two years since November 1, 2016.
This aspect will mainly increase the production volumes of domestic products.
The newly established State Housing Construction Agency launched its activity in 2016. A large construction project is being implemented in Yasamal district. The operations have been launched to construct social housing. This initiative has great social significance. It will greatly affect the construction sector and in particular, the production of building materials.
Around 1.68 million square meters of housing were commissioned in Azerbaijan in 2016.
According to the Azerbaijani State Statistics Committee, around 78,600 square meters of the total area of commissioned housing accounted for the houses built for internally displaced refugees.
Around 683.5 million manat were spent for the construction of housing in 2016. The main amount (636 million manat) accounted for the non-state enterprises and organizations, while 47.5 million manat - state-owned enterprises and organizations.
Around 11,200 residential buildings were built through the personal funds of citizens to improve living conditions. Most of buildings were built in the Nakhchivan Autonomous Republic, Baku, Lankaran, as well as Absheron, Shamkir, Tovuz, Kurdamir, Jalilabad and Gabala districts.
Around 850 kilometers of roads, 27 bridges and overpasses were built and repaired in the districts in 2016. According to the Azerbaijani president’s instructions, the operations were carried out to construct 120 kilometers of roads, connecting 480 settlements with a population of 790,000 people.
According to the Azerbaijani State Statistics Committee’s report as of 2016, investments in construction and installation work amounted to 10,834.77 million manat or 72.7 percent of total investments.
Real estate market
According to MBA Group consulting company, the prices on Baku’s primary housing market decreased by 31.53 percent in dollar terms in 2016. The prices continued to decrease in December and decreased by 3.68 percent.
A slight increase was observed only in the primary housing market, where prices in dollar terms increased by 0.48 percent. The prices declined in dollar equivalent by 13.47 percent for the year. The prices decreased by 7.21 percent in dollar terms in the secondary housing market in December, while by 32.69 percent for the year.
The prices decreased on the land market. The prices decreased by 3.28 percent in dollar terms on the land market in December, while the prices decreased by 32.06 percent on the market for the year. The prices decreased by 4.92 percent on the commercial property market in December, while by 81 percent for the year.
The same situation is observed on the rental housing market. The prices decreased by 3.35 percent in dollar terms on the market for the month, while by 22.27 percent in 2016.
The prices declined by 2.31 percent on the commercial property rental market in December, while by 36.88 percent for the year.
As opposed to the prices in dollars, the prices in manat increased in the market. The prices in manat decreased only in the secondary housing market by 2.94 percent in December and 13.68 percent for the year.
The prices in manat remained unchanged in the market of commercial facilities in December, but the prices increased by 2.6 percent for the year.
The prices in the primary housing market in manat equivalent increased by 5.1 percent and 49.99 percent respectively.
The prices in the land market increased by 2.28 percent and 19.06 percent respectively.
The prices in the housing rental market increased by 2.29 percent and 27.94 percent respectively.
The prices in the commercial property rental market increased by 2.18 percent and 9.41 percent respectively.
Construction material marketAccording to the Azerbaijani State Statistics Committee, the construction materials worth 346.8 million manat were produced in 2016, or 10.6 percent less than in 2015.
Cement production decreased by 14.8 percent up to 2,309.5 tons, gypsum plaster production – by 20.2 percent up to 147,200 tons, the report said.
The production of building blocks and cement bricks, artificial stone bricks or concrete bricks decreased by 37.3 percent up to 80,663 tons, while asphalt - by 24.9 percent up to 345,800 tons.
The production of building lime increased by 65.9 percent up to 27,447.5 tons, while precast concrete building structures increased fourfold up to 88,200 cubic meters in 2016.