Prices of Secondary Real Estate Market in Baku Increases 50%: Appraisal Company

Business Materials 19 September 2007 16:41 (UTC +04:00)

Azerbaijan, Baku / corr Trend U.Ismaylova / Prices in the secondary real estate market grew by 50 % in Baku in September 2007, Caspian Property Services (CPS) said on 17 September.

"The latest tragic incident at a construction site created an abnormal rise in prices," the company said. A sixteen-storey building collapsed in the one of the central streets of Baku on 28 August resulting in the deaths of twenty-four people.

The prices of flats at the secondary real estate market have been increased by owners wishing to sell, claiming that old buildings are more structurally sound and therefore safer than new ones and therefore their value has increased.

Prices in the first real estate market have not changed, CPS said. It is explained by the absence of supply and demand.

The recent tragedy has also affected the land market, significantly increasing prices.

"Lately, problems have even been observed in the rental market where renters are paying month by month, instead of several months in advance," the company said.

"At present, however, Baku's real estate market is at a full standstill and since the tragedy the company has not yet closed any deal for purchase and sale of flats," CPS said.

In August the average price of 1 sq m was $1,027 in Baku's first real estate market and $1,261 in the secondary market. The average price of a private home has grown by 0.6% to $176,780. In August, a high demand for flats at monthly rental price of AZN 300 was observed.