AZE.US
An influx of students ahead of the new academic year is expected to increase pressure on Baku’s rental market, pushing prices higher, particularly in neighborhoods near universities.
Apartment rents in Baku are expected to rise from August as thousands of students move to the capital from Azerbaijan’s regions ahead of the new academic year.
Real estate expert Firdovsi Khalilov told Democrat.az that the city’s housing market is already under significant pressure and offers few affordable alternatives for students and lower-income families.
According to Khalilov, Azerbaijan has an estimated 2.8 million residential properties for a population of roughly 10 million.
Based on an average household size of 3.8 people, that housing stock should theoretically be sufficient for almost 11 million residents. In practice, however, much of the available housing cannot meet current demand.
The expert identified three major problems.
The first is the poor condition of a large part of the country’s housing stock. Around 800,000 homes have either exceeded their intended service life or are effectively unsuitable for proper living, but continue to be occupied because residents have no alternative.
The second issue is internal migration.
Many people officially own or have access to homes in their native regions but actually live, work or study in Baku and on the Absheron Peninsula.
Khalilov cited the example of the Salyan district, which has a population of around 140,000. He estimated that nearly 40,000 people originally from Salyan, including economically active young residents, may now be living in Baku.
“In their home district, they have a house. But in Baku, where they actually live and study, they do not. This creates additional demand in the capital,” he said.
The third problem is the growing gap between household income and housing prices.
According to figures cited by the expert, the median apartment price in Baku stands at 250,000 manats, or about $147,000, while the median monthly rent has reached 1,002 manats, roughly $590.
Rental prices vary sharply by location.
An apartment in an older building in Sabunchu or the Ramana settlement may still be available for around 400 manats, about $235, per month. In central districts such as Sabail and Narimanov, monthly rents can reach 2,500 to 3,000 manats, approximately $1,470 to $1,765.
Housing near major universities is particularly expensive.
Khalilov said a 100-square-meter apartment in a new building near Azerbaijan Medical University may cost around 400,000 manats, or about $235,000.
With an estimated annual rental yield of 5%, such an apartment would generate monthly rent of roughly 1,700 manats, or $1,000.
A similar situation can be seen around Huseyn Javid Avenue, where several major universities are located.
Khalilov said the arrival of students in August will place additional pressure on prices because the capital lacks sufficient affordable housing.
“For an average resident from the regions and for students, renting in Baku is rapidly becoming unaffordable,” he said. “The student influx this August will again push prices higher because there is practically no alternative.”
The expert said the long-term solution would be the construction of modern student dormitories.
Such facilities, he argued, should not simply provide rooms for sleeping. They should be developed as full residential complexes with separate buildings for male and female students, gyms, cafeterias, food outlets, recreation areas and social spaces.
Only students should be permitted to live in the complexes, he added.
Khalilov also called on the government to offer incentives to private investors, including temporary tax exemptions and land allocations specifically designated for student housing.
“If student demand is not shifted away from the general rental market and toward dormitories, Baku will continue to face the same crisis every August and September, and the problem will become more severe each year,” he said.
AZE.US