Property price increased in Baku by 3.1% in 2012
Azerbaijan, Baku, Jan. 9 / Trend A. Akhundov /
In 2012, Baku real estate market prices increased by 3.1 percent, CEO of the MBA Group consulting company Nusret Ibrahimov told Trend.
"The relatively high growth was recorded in the housing market - by 8.5 percent (in 2012 a square meter of housing in Baku was worth, on average, $1,314, in 2011 - $1,214). Moreover, in the secondary market, housing prices rose by 9.8 percent, in the primary - by 8.1 percent," Ibrahimov said.
In 2012, commercial properties market prices increased by 8.4 percent, rental charges for these objects rose by 2 percent, and the cost of housing rent - by 3 percent. Price decrease was recorded only in the land market, during the year prices fell by 7.9 percent.
"The reason causing the increase in prices in the housing market is the excess of demand over supply, which is contributed to by growth in the money supply in the country and increase of incomes. No major changes were introduced to the cost of housing that increased by only 2 percent, as the prices for construction materials remained stable throughout the year.
From this point of view, such an increase in prices, especially in the housing market is related to inflationary factors. Reduction of prices in the land market can be attributed to more stringent requirements to the documents on land.
If a few years ago, little attention was given to the documents, currently, the lands with no documents are not highly demanded, which eventually leads to a decrease in buying and selling transactions and lowering of prices. There also were external factors that hindered the strong growth in prices. Among such factors are relative reduction of oil and gas prices on world markets by year-end and limiting external financing," Ibrahimov said.