An extraordinary activity on the secondary housing market was recorded in Baku on the background of a significant decline in property prices forecasted by real estate experts for the spring-summer period.
Following the report of the MBA Group consulting company, activity on the secondary housing market increased by 53 percent in February 2016 compared to the previous month. At the same time, over the last month a number of proposals have reached 1,458, which is 27 percent less than in February of the last year. A record figure was fixed then as 2,000 apartments were offered for sale at that time, according to the report.
Earlier, real estate experts said the housing prices fell by 26 percent since the beginning of 2016. Experts associate this phenomenon with the market stagnation that was affected by both external and internal factors, including worldwide economic instability, as well as fluctuations of national currency. However, growth of activity in secondary housing market was accompanied by a quite insignificant increase in property prices that amounted to one percent compared to the previous month. Thus, the price per square meter amounted to 1,620 manats/$1,019.
“Price per square meter does not exceed $1,000 in the majority of this apartments segment,” the MBA Group reported. “These apartments form 79.4 percent of the secondary housing market with the average cost of $889 per square meter.”
Following the report, the rest of the market is divided between apartments with a price ranging from $1,200 to $ 1,600 per square meter (14.5 percent, the average cost – $1,345 per square meter) and those costing more than $ 1,600 per square meter (6.1 percent, average cost – $1,954 per square meter).
An average period of object staying in the real estate market amounted to 180 days in February. This figure is four percent less than in January 2016, according to the report. This reduction is due to increased activity in the secondary housing market. Increase in the number of buyers, in turn, has led to an increase of the market by eight percent.
As before, most of the proposed apartments on the market are two- and three-rooms with market share of 65.7 percent in February. According to the activity coefficient, Nasimi, Yasamal and Narimanov districts are the most attractive areas. The majority of apartments for sale are located in Binagady, Nasimi, Narimanov and Yasamal districts of Baku (63.9 percent), according to the report. Surakhany and Khazar districts of the city, in turn, are on the last place among those wishing to buy property.
Today, the acquisition of housing is one of the most important issues for young families. To simplify the purchase of housing mortgages for young families in Azerbaijan, the state has already proposed to minimize or even cancel all pre-payments/deposits.
In Azerbaijan, the maximum amount for mortgage loans provided via the Azerbaijan Mortgage Fund is $31,900 with a rate of eight percent and maturity term of 25 years. The social mortgage loan, however, is issued in the amount of $31,900 with an annual rate of four percent and for a term of 30 years. A 15-percent down payment is required to receive this type of loan, compared to 20 percent with a conventional loan.