BAKU, Azerbaijan - Converting a one-room apartment into two rooms does not guarantee a higher bank valuation, and buyers may pay extra for a room that exists only in an advertisement rather than in the property documents, real estate expert Elnur Farzaliyev said.
In a televised interview, Farzaliyev discussed the legal and safety risks of remodeled homes, the factors pushing buyers toward older buildings and the effect of high prices on Baku’s housing market.
A common renovation turns the original kitchen into a bedroom and moves cooking facilities elsewhere. Sellers may then advertise the home as a two- or three-room apartment even though official records show fewer rooms.
Farzaliyev said mortgage lenders and banks accepting a property as collateral rely on the number of rooms recorded in the documents. Added partitions therefore do not automatically produce a corresponding increase in the appraised value.
Why Buyers Choose Older Buildings
The mismatch between apartment size and room count in some new developments is one reason owners undertake such conversions, Farzaliyev said.
A 65-square-meter apartment in an older Khrushchev-era building can contain three rooms, while a similar area in a newer building may be designed as a one-room apartment. Families needing separate bedrooms may therefore alter the layout themselves.
At the same time, three-room apartments in new developments can measure 130, 180 or even 200 square meters, putting them beyond the budgets of many buyers.
Farzaliyev said more compact and efficient layouts would broaden the pool of potential buyers. Many households need separate rooms without paying for a much larger total area, he said.
Moving a Kitchen Can Create Safety Hazards
Unauthorized kitchen relocation can affect ventilation shafts, gas pipes, electrical systems and other utilities. Installing a kitchen in an unsuitable part of an apartment may increase the risk of gas leaks, short circuits or other accidents, Farzaliyev warned.
Prospective buyers should compare the actual layout with the approved project and property documents, especially when renovations have increased the advertised number of rooms.
High Prices Slow Transactions
Farzaliyev said high prices have constrained buyer activity and that Baku’s real estate market has experienced pronounced stagnation for more than a year. A large share of remaining demand is concentrated in homes that can be purchased with credit, he said.
According to his estimate, more than half of the apartments with state-registry extracts sold in the capital during the past five years were purchased through various credit mechanisms.
Weak activity does not always persuade owners to reduce asking prices. In some prestigious residential complexes, Farzaliyev said, prices reach 20,000 manats per square meter.
Conditions differ outside the capital. Tourist areas attract investment in cottages, villas, hotels and restaurants, while property in many other communities remains difficult to sell.
Farzaliyev said the return of internally displaced people to restored communities and stronger regional development could eventually reduce pressure on Baku. Lower demand in the capital could then help stabilize prices, he said.
Check the Documents Before Paying
Problematic paperwork, dampness, the physical condition of the home and disputes involving neighbors are among the most common sources of regret after a purchase, according to Farzaliyev.
He advised buyers to complete a legal review before transferring money and to use a lawyer, attorney or qualified property specialist. The cost of professional verification is small compared with the potential financial loss from a defective transaction, he said.
Source: Vesti Baku, based on Elnur Farzaliyev’s interview.