Baku’s real estate market: three factors of stability
Baku, Azerbaijan, Jan. 3
By Anvar Mammadov – Trend:
The previous year was marked for Baku’s real estate market by relative stabilization of processes and increased activity. The data shows that the high price reduction rates observed on the market in 2015 and 2016 gradually declined during the year, and there was a relative stability on the market in late 2017.
Thus, if in 2016, the prices on the Baku real estate market decreased by 31.53 percent, then according to the results of November 2017, the annual reduction was about 4.3 percent.
Analyzing the situation, one can come to the conclusion that the stabilization on the market was caused by the following three main factors.
Implementation of pilot project to rebuild first microdistrict and a number of other districts of Baku
Under a decision of the Cabinet of Ministers on measures to rebuild the first and other microdistricts of Baku, dated March 10, 2017, the functions of the customer for reconstruction work that will be carried out in the territory of the first microdistrict as a “pilot project” are entrusted to the Ministry of Emergency Situations on the basis of its proposal.
Construction of social housing in Azerbaijan
The work in this field began in 2016. The State Agency for Housing Construction was established in April, and in December 2016, the ceremony for laying foundation was held for the first 9-storey building and school that are being built in the Yasamal residential complex, which is the Agency’s first project.
Moreover, in late December 2017, the ceremony for laying foundation was held for the first 7-storey building that will be built in the Hovsan residential complex, which is the Agency’s second project.
Volume of mortgage loans increased
In 2017, the Azerbaijan Mortgage Fund resumed active crediting after the restructuring of its activity. The restructuring process, taking place almost throughout the entire 2016, has affected the real estate market. If in 2016, the Fund issued 188 loans worth 33 million manats, and then in 2017, the number of loans reached 3,182 and the volume of crediting increased up to 232 million manats.
These three factors together have had a significant impact on the stabilization of the real estate market.