House renting lowered in Baku by 13 percent
Azerbaijan, Baku, Sept. 12 / Trend A.Akhundov /
The stagnation in Baku's rental market has reached its limit during the summer months, as in previous years, the CEO of MBA Group Nusret Ibrahimov told Trend.
"Prices fell by 13 percent from $756 to $653 between May and July. The number of transactions in the market decreased from 238 to 183," Ibrahimov said.
The share of expensive housing in the demand portfolio (rental price exceeding $1,000 per month) declined from 18.9 to 14.4 percent. Low-cost houses (less than $500 per month) rose from 22.3 to 25.7 percent in the summer months, he added.
He said that a certain portion of demands in the rental market was provided by persons with short-term contracts, for 2-3 months. The market still has a record high demand for apartments offered to the market at low and medium prices.
"The market recorded an increase in proposals by 12.3 percent in August 2011, unlike in previous years. This is linked with the direction of apartments acquired through a mortgage to renting, and owners' desire to earn additional income to thus repay bank loans," Ibrahimov said.
The share of expensive apartments in the proposal portfolio increased from 8.9 to 13.4 percent in June-August.
"If the share of three-bedroom apartments was 31.3 percent early in the summer, it rose to 36 percent in early September," he said.
He said that prices in the rental market varied according to demand.
"If the average price in the rental market was $775 for an apartment, or $9.7 per square meter in early June 2010, then the figure was $762 for an apartment or $10.4 per square meter in early June 2011. The average price for an apartment was $711 in August 2010.
Today the figure is $762. However, the average area of apartments for lease has also increased to 76.5 square meters," he said.
During the three-month period, the number of foreign investors and businessmen in Azerbaijan's housing rental market decreased.
"Foreign businessmen working in Azerbaijan have bought flats and left the rental market," he said.