Why is housing becoming more expensive in Baku?

The growing investment attractiveness of urban apartments and supply shortage have led to a fantastic price increase. But apartments differ from one another, so the cost can fluctuate with impressive amplitude. Nevertheless, prices will continue to rise, writes the newspaper "Caspian".

"Will become more expensive, will not fall in price per square meter" - the placement of the comma no longer raises questions among many specialists and participants in the real estate sector. According to market analysts, a significant increase was felt throughout the past three months of the year. Moreover, housing costs are rising not only in the new construction segment - the old housing stock is also increasing in price. Among the main reasons, specialists cite the decrease in the purchasing power of money. Due to inflation and a shortage of investment instruments, the attractiveness of capital apartments for monetary investments is increasing.

Prices are fantastic

But there are other reasons. Mortgage loans play a special role in increasing the average price per square meter, as well as projects for demolishing buildings and constructing new ones, indicates Vugar Oruj, chairman of the Society of Appraisers of Azerbaijan. Recently, his subordinate association reported the results of a study on apartment prices in 9 of 12 capital districts. As the figures showed, a square meter of capital housing is now offered on average for 2-3 thousand manats. At the same time, prices depend on the location of apartment buildings.

The specialists of the association record especially high prices in the Nizami, Khatai, Yasamal, Narimanov, and Nasimi districts of Baku. The cost of a square meter of residential real estate in these areas has even exceeded 3 thousand manats. But further from the capital - in the Binagadi, Surakhani, and Sabunchi districts, buying an apartment will cost less. The average price in apartment buildings on the periphery does not exceed 2 thousand manats per square meter. However, investors are not rushing to the outskirts, fearing low returns on their investments. In the buyers' view, profitability in the center is much higher due to more expensive rent and high dynamics of price growth.

Should we expect a lull?

The highest profitability with such investment turned out to be in large cities, especially in the capital. Therefore, prices in Baku are rising like yeast, and the purchase of urban apartments is perceived not just as a roof over one's head, but also as a way to preserve and earn additional funds.

According to the State Statistics Committee, in the first quarter of this year, apartment prices increased by an average of 14.4% compared to the same period last year. Notably, the secondary housing stock is becoming more expensive faster. While the increase in new buildings reached 12.9%, the "secondary market" in the capital region rose by 14.4%. Real estate leads in investment returns also because the increase in this market exceeded the general inflation rate by 2.6 times.

However, in the future, the cost of apartments may decrease. According to specialist in this field Elnur Farzaliyev, price reduction is inevitable due to the decrease in the share of apartments suitable for mortgages. In addition, former forced migrants are returning to Karabakh, and the city apartments given to them are being