BAKU, Azerbaijan - Rental housing prices in Baku are unlikely to decline even over the longer term, according to real estate expert Ramil Osmanli, as specialists call for simpler lease registration and stronger protections for both tenants and landlords.
Much of the capital’s rental market remains informal, leaving the parties vulnerable to disputes over rent increases, eviction, repairs, damaged property and the return of deposits, according to an ITV discussion reported by Vesti Baku.
Osmanli, economist Ayyub Karimli and Ilgar Huseynli said legal leases should be easier and less expensive to arrange, while the government should provide stronger incentives for landlords to declare rental income.
Expert Estimates 350,000 to 400,000 Landlords
Osmanli described Baku’s rental market as chaotic and estimated that 350,000 to 400,000 people rent out housing in the city. He did not provide a source for the figure, making it an expert estimate rather than official data.
He said inspections alone cannot effectively supervise a market of that size. Even checking 100 apartments a day would not provide comprehensive coverage, he said.
Osmanli also cited a hypothetical case in which paperwork and related expenses cost a tenant 150 manats ($88) and a landlord 200 manats ($118), only for the property to become vacant three months later and the process to be repeated. He did not specify what those expenses included.
He proposed a further reduction in the tax burden on rental income. Azerbaijan already reduced the tax rate on income earned when one individual rents residential property to another individual from 14% to 10%, effective Jan. 1, 2026. The rule does not apply to hotels or hotel-type accommodation.
Both Sides Often Avoid Written Contracts
Karimli said written contracts protect both owners and tenants. Landlords sometimes avoid agreements to evade taxes, while some tenants are reluctant to formally accept obligations covering rent, deposits and the condition of the property, he said.
The absence of clear terms can lead to sudden eviction demands, unanticipated rent increases and disputes over damage. Karimli also pointed to difficulties faced by young men, women and families with children when searching for housing.
Huseynli called for a state mechanism to protect people living in rented homes. He said contracts should clearly assign responsibility for utility-system failures, appliance repairs and damage caused by tenants.
Lease agreements should also specify how deposits are paid and returned, whether the apartment is insured and how future rent changes will be calculated, he said.
A Contract Brings Predictability, Not Lower Rent
Osmanli said current market trends provide no basis to expect rents to fall in the short or long term, although he did not cite price-series data for that forecast.
A written lease does not by itself make an apartment cheaper. It can, however, lock in the rent, term of occupancy, procedure for price changes and termination rules, giving tenants more control over household budgets and landlords clearer protection for their property.