Review of construction sector in Azerbaijan (January-August 2013)

The analysis of development trends in the Azerbaijani construction industry allows evaluating the enormous potential of the industry.

The volume of construction work increased by 12.8 percent to 4.96 billion manat in Azerbaijan in January-August 2013 compared to the same period of 2012, the Azerbaijani State Statistics Committee reported.

According to the report, around 67.5 percent of the total volume of construction work accounted for the primary construction, reconstruction and expansion, 17.6 percent - for overhaul, 2.6 percent - for current repair and 12.3 percent - for other construction work.

Around 79 percent of the construction work was carried out by non-state construction companies.

Main indicators of construction sector in Azerbaijan in January-August 2013

Jan.-Aug. 2013

Compared to Jan.-Aug. 2012

Commissioned: residential buildings, total area, thousand sq. m



Clinics and health centers



Secondary schools, educational facilities


7,7 раза

Pre-school educational institutions, facilities


2,4 раза



6,2 раза

Funds directed to fixed capital, in mln manat



- for the construction of production facilities



- for the construction of facilities in service sector



- for construction and installation work



Source: State Statistics Committee

The housing commissioning volumes dropped by 49.55 percent in Azerbaijan in August 2013 compared to record July, but their annual growth remained double-digit. Around 132,800 square meters of housing were commissioned in August 2013 compared to 263,200 square meters (still the best index in 2013) in July this year and 145,900 square meters in August 2012. Around 1.313.9 million square meters of housing were commissioned in January -August 2013 or 23.04 percent more than in the same period of 2012 (1.067.9 million square meters).

The Central Bank of Azerbaijan stressed that the turnover of the real estate market in the country for eight months of 2013 increased by 36.85 percent compared to the same period of last year. So, as of September 1, 2013, residential property market turnover (notaries' cash turnover) was 2.449.17 billion manat compared to 1.789.612 billion manat a year earlier.

The revenues at the accounts of notary offices in January-August as a result of the real estate purchase / sale transactions amounted to 1.074.550 billion manat compared to 778.184 million manat in the previous year (+ 38.08 percent) and writing-off these accounts - 1.374.620 million manat compared to 1.011.428 billion manat (+ 35.91 percent).

Moreover, the Central Bank stressed the increase in intermediaries' income (banks, notaries and realtors) on residential real estate transactions by 28.65 percent for the first eight months of 2013. As of September 1, 2013, intermediaries' income accounted for 300.07 million manat compared to 233.244 million manat a year earlier.

Building material market

Companies engaged in producing building materials in Azerbaijan, made goods worth 230.8 million manat in January-August 2013, which is 21.6 per cent more than the same period of 2012, the State Statistics Committee said.

According to the information, the companies produced 1.3 million tons of cement in January-August 2013, a 2.7 per cent increase per year, 135,500 tons of construction gypsum, an increase of 1.7 times and 914,700 tons of ready-mixed concrete, a 9.2 per cent increase.

Stocks of construction materials worth 18.6 million manat, which is 6.6 per cent of the total finished goods in the country, were created at the warehouses of enterprises by September 1, 2013.

Housing market

According to MBA LTD consulting company, average prices in the primary real estate market increased by 4.32 percent in August compared to July. In particular, one square meter of housing in new buildings was offered at $1,039 compared to $ 996 in July. The prices in the primary market increased by 16.87 percent compared to early 2013 and by 19.84 percent compared to the same period of 2012.

In August housing on the secondary market fell in price by 2.19 percent from $1,692 to $ 1,655 per square meter. The prices in this segment of the real estate market have increased by 9.75 percent since early 2013 and by 15.82 percent compared to the same period of last year.

The prices for land plots have decreased by 3 percent from $19,243 to $18,665 per hundred square meters for the past month. A 0.43 percent increase in prices has been observed in this segment of the market for the first eight months.

The prices declined by 1.86 percent at an annual rate. The cost of one square meter of commercial real estate increased in August by 5.92 percent (from $3,631 to $ 3,846). The prices in this category increased by 16.12 percent in January -August and by 10.07 percent per year.

The rent of commercial facilities fell in price this month by 7.15 percent - from $20.98 to $19.48 per square meter. The prices fell by 7.37 percent for eight months and increased by 10.68 percent for 12 months.

The prices for rental apartments increased by 8.77 percent in August compared to July. On average, the rent of one square meter of housing in Baku was $10.6 in July, while $11.53 in August.

The cost of apartments remained unchanged compared to early 2013, but increased by 0.96 percent at an annual rate. In general, the prices on the real estate market of the capital increased by 1.11 percent in August compared to July. The prices increased by 7.43 percent in January -August, while by 9.25 percent at an annual rate.

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