By AZE.US
Buying an apartment in a newly built residential complex in Baku is becoming increasingly difficult as prices rise and developers tighten their in-house financing terms.
Prices in some projects now start at 2,000-2,500 manats ($1,176-$1,471) per square meter. Down payments are typically at least 30%, while monthly installments can reach 5,000-10,000 manats ($2,941-$5,882).
Elnur Azadov, head of the Azerbaijan Realtors Association and an expert on real estate and construction, told Globalinfo.az that property prices have increased by approximately 80% over the past five years.
He attributed the surge partly to higher construction material costs. The price of reinforcing steel, for example, reportedly climbed from 700 manats ($412) to 1,200 manats ($706) after large-scale construction began in the Karabakh Economic Region in 2020.
Azadov also pointed to a sharp decline in the number of new residential projects. Compared with 2016, the volume of projects launched in 2026 has fallen by roughly tenfold, he said.
The decline has significantly weakened competition among developers, allowing the remaining companies to set apartment prices 15% to 20% above prevailing market levels, according to the expert.
Demand, meanwhile, remains high while supply is limited. Azadov said prices in newly constructed buildings have risen by at least 15% annually in recent years.
Developers Shorten Payment Periods
Higher prices have been accompanied by tougher purchasing conditions, affecting both bank mortgages and installment plans offered directly by developers.
When competition was stronger, construction companies typically offered three- or four-year installment plans, sometimes extending them for even longer periods. The longer terms helped buyers keep monthly payments relatively manageable.
Many developers now limit their in-house installment plans to two years. At current property prices, the resulting monthly payments put new apartments beyond the reach of many middle-income residents.
The tougher conditions have pushed more prospective buyers toward bank mortgages. Azadov said the number of people using mortgage loans to purchase homes has increased significantly compared with previous years.
AZE.US