BAKU - Baku and the Absheron Peninsula accounted for three-quarters of all transactions on Azerbaijan’s resale housing market in 2025, underscoring the concentration of demand around the capital.
The average price of housing in Baku reached 2,482 manats (about $1,460) per square meter, up 13.3% from a year earlier, according to a report published by Vesti Baku. The dollar conversion uses the Central Bank of Azerbaijan’s official rate of 1.7000 manats per U.S. dollar on Oct. 20, 2026.
Sumgayit accounted for 9.2% of resale-market transactions, while Ganja, Azerbaijan’s second-largest city, accounted for 5.3%.
Experts cited in the report linked the concentration of demand to employment opportunities, income levels and access to services. Buyers consider not only an apartment’s price, they said, but also where they can find work, educate their children and obtain medical care.
Regional market activity is also constrained by a limited supply of newly built apartments. Experts said creating jobs, improving infrastructure and expanding the construction of affordable housing would be needed to change the pattern.
One proposal would cut the subsidized mortgage rate in the regions to 2% from 4% to stimulate demand and encourage new supply.
“The subsidized mortgage rate is currently 4%, but it could be 2% for the regions,” one expert said in the television report.
The expert said the mechanism’s budget financing would allow residents outside the capital to receive a lower rate.
Credit already plays a major role in home purchases. According to an expert estimate cited in the report, more than 60% of apartments sold over the past five years were bought using various forms of financing, including mortgages and installment plans offered by developers.
Two-room apartments were the most popular property type in 2025, accounting for 39% of registered transactions. Yasamal, Khatai and Nasimi led Baku’s districts by the number of apartments sold.
Housing prices rose 11.2% across Azerbaijan over the year and 13.3% in Baku.