The monitoring by the public organization Participants of Real Estate reported that as of the end of March, 189 construction companies in Baku built 461 new buildings. In February 202 construction companies built 550 new buildings.
Baku Realtors Association (BRA) noticed decline in the real estate market of Azerbaijan, which affected the profitability of the construction sector. Today, it totals 13 percent. Liquidity of the local housing market also fell from 85 percent to 62-63 percent. This dramatically increased the exposition period. Already there is an example when it is 19 months, and in general (on land) exposition period is equal to one year.
In the first quarter of 2009, the turnover in the real estate market in Baku fell 40 percent in the housing sector compared to the same period of 2008. In March, number of deals on the Baku secondary housing market dropped 3.1 percent compared to February. The price reduction composes 20-23 percent an annual calculation.
Investors are not interested to invest in housing, which does not bring expected income. Because of declining prices, the construction companies are not able to build new housing at the expense of reinvestment. As a result, if in 2006-2007 the number of newly constructed buildings totaled 25-30, today it is not more than 1-2 buildings.
This situation led to a restructuring in the construction sector. Construction companies transferred from housing to commercial construction (hotels, infrastructure, etc.). As a result, the percentage of housing fell to 20 percent of the total volume of construction work.
First housing market
In March the average prices fell 11.4% on the first housing market of Baku. The situation in the first housing market of Baku continues to be affected by the stagnation in the real estate market as a whole. Experts see the reason for price reduction in fall in the purchasing capacity of population, as well as problems appeared in the field of sales on credit. They also predict that the tendency of lower prices will increase in coming days.
Public organization Participants of Real Estate reported that in March the average price of apartments sold in the newly constructed buildings fell at 6.7 percent compared with February. Thus, the price of apartments fell from $1,078 per square meter up to $1,006.
Source: public organization Participants of Real Estate
The average area of apartments in the high buildings decreased 0.1 percent to 121.2 sq.m. The average height of new buildings in August was 15.1 floors.
Source: public organization Participants of Real Estate
The drop of prices were observed in all districts of Baku, including Nasimi -9.7 percent, Nizami -32.5 percent, Khatai -7.6 percent, Sabail -16.5 percent, Surakhani - 10.2 percent, Sabunchi -21.4 percent, Binagadi -2.7 percent, Narimanov -17.4 percent and Yasamal - 12.5 percent.
In March, number of deals on the Baku secondary housing market dropped 3.1 percent compared to February. Part of new buildings on the secondary housing market increased by 0.9 percent to 60.3 percent compared to February, the Participants of the Real Estate Market public organization reported.
A 0.4-percent growth of offers on the market caused additional price cut. Average prices on the market fell by 4.7 percent to $1.250 per square meter.
Source: public organization Participants of Real Estate
The exposition term of the secondary market increased by four days and was 115 days. The average price of one room hit $52,680 (+0.7 percent). The average price of apartments was $124,440 (-0.6 percent).
Source: public organization Participants of Real Estate
Apartments in the Yasamal, Nasimi, Narimanov and Khatai Districts of Baku comprise majority of the secondary housing market portfolio (78.4 percent).
Land market
In March the prices on the land market of Baku dropped 3.2 percent to $21,630 per one hundred square metres, the Participants of the Real Estate Market public organization reported.
Source: public organization Participants of Real Estate
Prices reduced 6.3 percent in III and IV zones of Baku, especially, in Binagadi region.
Roughly 812.4 hectare of land was offered on the market in March, 76.9 percent hit empty plots, uninhabited and old plots.
Term of land plots exposition increased 1.8 percent to 215 days last month.
High prices in I and II zones led to reduction of demand, as well as prices. Great number of proposals, reduction of construction rates and demand led to significant drop in prices in III and IV zones of Baku.
|
Zones |
Prices, $per hsm |
Measurement in average price % |
|
I зона |
209 123 |
-0,9 |
|
II зона |
125 100 |
-1,7 |
|
III зона |
30 382 |
-7,0 |
|
IV зона |
6 221 |
-5,0 |
Source: public organization Participants of Real Estate
Market of commercial facilities
In March, the proposals in the market of commercial facilities of Baku grew 4.4 percent compared to February. The term of exposure of non-residential facilities in the last month rose 3.2 percent, which affected the reduction in liquidity and increased the level of risk in the market.
In March, average prices in the market of commercial facilities of Baku fell 2.8 percent, prices for the rental of facilities - 1.9 percent. The average price per square meter of non-residential facility in the last month amounted to $3,180 compared to $3,270 in February.
Source: public organization Participants of Real Estate
Average prices in this market segment of real estate in Baku fell 6.8 percent compared to last quarter, the same period of last year - 10.1 percent.
Market of building materials
Construction materials continue to cheapen in Azerbaijan. The monitoring by the public organization Participants of Real Estate revealed that the average cost of construction materials decreased 5.5 percent compared with February 2009.
The share of the construction materials being produced in Azerbaijan makes up 54.8%.
In March the prices declined on 33 kinds of construction materials, remained stable on 51 and increased on 1.
The State Service for consumer market control at the Ministry of Economic Development revealed sale of fake cement.
The Ministry said fake cement was revealed in the territory of Sabayil district of Baku in a wholesale trade object owned by Dovleteli Jabrayilov.
So, 382 packages of Special M-400 Garadagh Cement each with weight of 19.1 tons were withdrawn from sale and sent to laboratory to examine quality.
The state service continues monitoring given the probability of selling such product in other trading objects.