Construction sector

According to the data provided by the State Statistics Committee of Azerbaijan, in January to June 2008 the amount of the construction works in Azerbaijan being carried out by the construction companies is 33.1% or AZN 1330.7mln more. Of them, AZN 1023.1mln (76.9% of the gross volume) fell on the newly constructed buildings, AZN 181.2mln (13.6%) - capital repair, AZN 55.8mln (4.2%) - current repair, AZN 70.6mln (5.3%) - other works. The construction works by the private construction companies totaled AZN 968.4mln and Public enterprises - AZN 362.3mln.

Dynamic of construction works being carried out by construction companies

Source: State Statistics Committee

In June 2008 the volume of housing area decreased by 14.11% in Azerbaijan as compared to the last year. According to the data provided by the State Statistics Committee, in June 168,000 sq.m housing area was given into use against 65,400 sq.m in May. In the first half year of 2008, the housing area given into use made up 596,700 sq.m, an increase of 21.1% from the same period of the last year (492,700 sq.m).

In January to June, AZN 257.4mln ($310.128mln) was allocated for the housing construction, an increase of 8.6% from the figures for the same period of 2007. In June AZN 99.3mln was allocated for housing construction.

According to the data by the consulting company MBA group, the activity of the Baku real estate market decreased in June by 0.16 (only 16 of 100 proposed facilities were sold).

Prices of real estate in June grew by 0.9%, the period of the capitalization of property grew by 1.8%, the profitableness of property due to an increase in the expenditures reduced by 1.7%.

The portfolio of proposals in market in June is apartments -55%, land market - 2%, rent market - 13 % and sale of commercial premises - 7%. The demand and proposals for the apartments kept their urgency like previous months.

In the first market in January - June, the prices grew by 10.1%. In the second market, the increase was 19.6%. In the first market the average price of sq.m grew by 0.3%, but reduced in the second market by 0.4%.

Source: consulting company MBA group

The prices for the rent of the apartments lower than the average prices decreased from 69.3% to 57.7%.

Renting price of the housing area in I and II zones of the city, in AZN per month

Source: consulting company MBA group

The prices for the private houses in June increased by 3% to $1204 per sq.m. The average prices in the land market of Baku increased by 0.2%. The number of the operation on sale-purchase of the land plots decreased by 2.8% in June.

As of 1 June 2008, 555 buildings are constructed in Baku by 212 companies.

Summer season led to the reduction of prices for building materials in Baku. In June in the market of building materials of Baku, prices reduced by 1.9%, since the beginning of the year - 16.8%, and as compared to the same period of 2007 - 29.8%. The share of the building materials of local production in the market was 41.4%, which is equal to the indices of May.

Since the beginning of the year, consulting company MBA group has been conducting monitoring of 48 names and 105 types of the building materials, from which increase was observed in 300, decrease - 45, and the stability of prices was observed in the remaining 27 types.

According to the results of the monthly review of market, the reduction of prices for the building materials is connected with the seasonal problems of the profitability of real estate. As a result, the activity of the market of building materials in June reduced by 6.9%, and as compared to the same period of 2007 - 12.8%.

In January to June, the production of the construction materials in Azerbaijan decreased by, State Statistics Committee reported.

Source: State Statistics Committee