Review of construction sector in Azerbaijan (January-May 2016)

Analysis Materials 18 July 2016 15:07 (UTC +04:00)

According to the Azerbaijani State Statistics Committee, some 110,800 square meters of housing were commissioned in Azerbaijan in May 2016 compared to 134,250 square meters in May 2015.

Over 554,500 square meters of housing have been commissioned in Azerbaijan since early 2016 or by 23.4 percent less than in the same period of 2015.


Jan.-May 2016

Compared to Jan.-May 2015 (percent)

residential buildings, total area, thousand sq. m






secondary schools, number of educational facilities

2 118


Funds directed to fixed capital, in mln manat

5 388,8


- for the construction of production facilities

4 591,1


- for the construction of facilities in service sector



Funds directed to fixed capital, in mln manat

3 725,8


Some 69.6 percent of the total volume of construction work accounted for primary construction, reconstruction and expansion, 12.1 percent - overhaul, 2.7 percent - current repair and 15.6 percent - other construction work.

Some 88.1 percent of the total volume of construction work was carried out by non-state construction companies.

According to the MBA Group consulting company, the real estate prices remained stable in Baku in May 2016. The prices in US dollars decreased by 0.11 percent compared to April, while the prices in manat remained unchanged. This testifies to the stabilization of the market.

The primary housing prices in manat decreased by an average of 1.04 percent [while in dollars increased by 0.51 percent]. The secondary housing prices in manat increased by 1.23 percent [while in dollars increased by 1.77 percent].

The land plot price in manat for the month increased by an average of 1.18 percent, while in dollars increased by 1.72 percent. The commercial property prices greatly decreased. The prices in manat decreased by 2.15 percent, while in dollars - by 1.62 percent.

The prices have decreased by three percent on the real estate market compared to early 2016. The situation may change by late 2016 and it is not ruled out that the prices will increase by two more percent.

Rental housing market

According to MBA Group consulting company, the rental housing prices in Baku this summer will be lower than in 2015. The reason is a decline of real estate prices in general, as the real estate prices in Baku have decreased by three percent since early 2016.

Usually in previous years, the real estate prices in Baku increased in spring months. Then, the prices stabilized in summer and declined by the end of the summer. The prices increased in early autumn again. But in 2016 the prices have decreased since January.

The market prices will begin to stabilize in summer. The prices are expected to increase only by the end of August. The real estate market prices will likely to gradually stabilize in summer, especially on the housing market. The prices will increase only from the end of August and early September.

The rental housing market is traditionally in demand in summer months. So, the prices for the country houses are mainly observed on the market. The prices for rental apartments and houses in the city are usually lower in summer than in other seasons. The prices for rental apartments and houses in the city are gradually declining by the end of August, but then begin to increase. This is connected with an increase in the number of students coming from the districts of the country. The prices for rental country houses are increasing from late May, reaching peak in July and August and then begin to gradually decline.

The average rental housing price in the summer months ranges from 4 manat to 5.6 manat per square meter of housing. The rental price for one square meter of housing in the country house is three manat in winter, but in summer the prices increase up to 4-5 manat per square meter. The rental housing prices decrease from 6.5-7 manat per square meter to 5.5-5.6 manat in the city in summer.

After several months of decline the rental housing prices began to gradually stabilize. The prices decreased by 2.3 percent in April compared to March. The prices increased by 1.5 percent in May compared to the previous month.

Construction material market

The companies engaged in building material production in Azerbaijan, produced goods worth 122.2 million manat in January-May 2016, or 26.2 percent less than in January-May 2015.

During this period, Azerbaijan produced 829,000 tons of cement (a 30.3-percent decrease compared to January-May 2015), 50,300 tons of gypsum plaster (a 34.9-percent decrease), the report said.

Azerbaijan also produced 177,800 tons of ready-mixed concrete (a 61.4 percent decrease), 21,400 cubic meters of precast concrete building structures (a 3.1 times growth), 1,530 tons of processed marble, travertine, alabaster and items made of them (a 60 percent decrease).