Expert: ”rise of Prices in Baku Housing Market Will Continue this Year, Too“

Agshin Rafigoglu; Rise of prices in primary and secondary housing market of Baku is caused by increase of personal incomes, expert on real estate market, Director of MBA Group Consulting Company Nusrat Ibrahimov told APA-Economics.

”As the personal incomes are increasing people try to improve their living conditions, renew their old houses,“ he said.

The expert says at the same time, the persons with stable income or those working at large commercial organizations are active in this market: ”They use opportunities of mortgage and improve their living conditions purchasing new houses. This causes increase of demand at the market and influences prices in the housing market“.

One more reason of the rise of prices is destruction works in some areas of Baku. Persons, whose house and facilities are knocked down, get compensation from the state. And this influences current prices at the market: ”Approximately AZN 1,500 compensation is paid for 1 m² of the demolished houses. This to some extent impacts the processes as a psychological factor. Thus, AZN 1,500 is paid per m², while earlier it was AZN 1,000-1,200“, the expert said.

According to Ibrahimov, the fourth factor influencing the price in the housing market is the migration in the capital: ”Birth rate increased in the country. The number of people coming from regions to the capital and from abroad to Azerbaijan increased. They increase demand portfolio and cause rise of prices“.

The expert says all these are factors influencing price rise in the real estate market: ”However, there are also external factors influencing prices. Today, the price rise of the houses are not observed only in Azerbaijan, but also in South Caucasus region, including Georgia, Armenia, as well as Turkey, Russia and Central Asian countries. Of course, Azerbaijan is a part of this global market and the market is undergoing external impact“.

According to Ibrahimov, another factor causing rise of prices is that it should be regarded as a part of general development of economy.

”Rising and declining parts of the global economy are sinusoidal. Development...