AZE.US
Demand for small apartments is growing in Baku as rising property prices push buyers toward homes of 40-45 square meters or less.
An online market review by AZE.US found that asking prices for compact apartments started at approximately 55,000 manats ($32,350) in late August 2026. In central Baku, however, even a 29-30-square-meter apartment can cost more than 140,000 manats ($82,350).
Real estate expert Ramil Osmanli said many compact apartments are now purchased as investments rather than for the buyer’s own use. Investors focus on the total purchase price, liquidity and potential rental income rather than floor space alone.
Housing Prices Rose 8.6%
The shift toward smaller homes comes amid continued property-price growth.
According to Azerbaijan’s State Statistical Committee, housing prices increased 8.6% year over year in the second quarter of 2026. Prices rose 12.4% in the primary market and 8.6% in the secondary market.
Compared with the first quarter, nationwide housing prices increased another 1.6%, including a 2.6% rise for new homes and 1.5% for resale properties.
During the first half of 2026, prices were up 8.4% from a year earlier. New housing recorded the sharpest increase, at 12.7%, according to the committee’s June economic report.
Market estimates published in February placed Baku’s average price at approximately 2,677 manats ($1,575) per square meter in older buildings and 3,004 manats ($1,767) per square meter in new developments.
What Small Apartments Cost in Baku
An AZE.US review of Bina.az listings on Aug. 31 found a substantial price gap between outlying neighborhoods and central Baku. The figures represent asking prices, meaning final transaction prices may be lower after negotiations.
In Ahmadli, a 22-square-meter apartment was listed for 55,000 manats ($32,350), equivalent to around 2,500 manats ($1,470) per square meter.
Larger one-bedroom units of 45 square meters were offered for between 106,500 and 129,000 manats ($62,650-$75,880). Current Ahmadli listings show that even in a relatively affordable area, a standard one-room apartment can cost more than 100,000 manats.
In Yeni Yasamal, compact apartments were listed at:
- 133,000 manats ($78,240) for 42 square meters;
- 129,000 manats ($75,880) for 45 square meters;
- nearly 160,000 manats ($94,120) for 58 square meters.
That translates into approximately 2,750-3,170 manats ($1,620-$1,865) per square meter. Yeni Yasamal listings indicate that the entry price for this segment is now close to 130,000 manats.
Near the Ganjlik metro station, one-room apartments were advertised for approximately:
- 119,000 manats ($70,000) for 35 square meters;
- 130,000 manats ($76,470) for 40 square meters;
- 175,000 manats ($102,940) for 50 square meters.
Prices in these examples ranged from approximately 3,250 to 3,500 manats ($1,910-$2,060) per square meter.
Compact apartments are considerably more expensive in the city center. Near the 28 May metro station, 29-30-square-meter properties were offered for 140,000-141,000 manats ($82,350-$82,940), or as much as 4,700-4,860 manats ($2,765-$2,860) per square meter.
Near the Nasimi Market, a 45-square-meter apartment was listed for 201,000 manats ($118,240).
Rental Returns of Around 4%-5%
One-room apartments of approximately 40 square meters in Ahmadli and Yeni Yasamal were offered for rent at around 450 manats ($265) per month.
Near the 28 May metro station, asking rents for 45-50-square-meter apartments ranged from approximately 700 to 800 manats ($412–$470) per month.
A compact apartment purchased for 106,000-133,000 manats and rented for 450 manats per month would generate a gross annual yield of roughly 4%-5%.
The calculation does not include renovation costs, furniture, taxes, building fees, broker commissions or periods when the property remains vacant. The owner’s net return would therefore be lower.
Small apartments nevertheless tend to attract tenants more quickly and require less capital than larger properties. Their liquidity, rather than rental yield alone, makes them attractive to investors.
Apartments Are Becoming Smaller
The reduction in apartment size appears to be a longer-term market trend.
An ABB study found that the average size of apartments included in its market analysis fell from 118 square meters in 2021 to 84 square meters in 2022. It stood at 85 square meters in 2023.
The average number of rooms also declined from 2.7 to between 2.5 and 2.6. ABB’s property market analysis linked the trend to growing demand for more compact and relatively affordable housing.
Osmanli said one-room and small two-room apartments were rare in central Baku developments about a decade ago. Developers are now increasingly including them even in projects located near the city center.
Demand is also being supported by residents displaced from aging buildings scheduled for demolition. Compensation may be insufficient to purchase a larger apartment in the same neighborhood, while many residents are reluctant to move far from their established communities.
Prices Could Continue Rising
If Baku’s broader housing market continues to appreciate, demand for compact apartments is likely to increase further.
Not every one-room apartment qualifies as a small property. Some Baku developments offer one-room units of 50-65 square meters. The strongest demand is concentrated in homes measuring no more than 40-45 square meters, because they offer the lowest total purchase price.
Limited availability in central districts may also cause these apartments to command a higher price per square meter than larger units in the same building.
AZE.US