By AZE.US
Rental prices in Baku are expected to continue rising, with neighborhoods near the city center, universities and metro stations attracting the strongest investor interest. One- and two-bedroom apartments remain the most sought-after properties.
Real estate expert Nofel Guliyev estimates that rents across the capital have increased by about 6% to 12% in recent years. The rise has been uneven, however, with some neighborhoods and housing categories recording significantly larger increases.
Other market specialists estimated that rents were approximately 20% higher year over year at the start of the new academic season. The difference between the figures likely reflects variations in location, apartment type and the periods covered by each assessment.
Where Rents Are Rising Fastest
Guliyev identified several areas as particularly attractive for investors seeking apartments to rent out:
- White City;
- the area around Yusif Safarov Street;
- Ganjlik and Ataturk Avenue;
- parts of the Khatai district;
- neighborhoods near universities;
- the area around Elmlar Akademiyasi metro station;
- central Badamdar and the Third Residential Area.
Rents in parts of Badamdar have increased by an estimated 7% to 10%. Demand there is supported by relatively cleaner air, city views and some neighborhoods’ distance from Baku’s most congested roads.
The Eighth Microdistrict in Binagadi and the area around Darnagul metro station remain more affordable options for property investors. Rental prices there, however, are less stable than in central districts or neighborhoods close to universities.
As housing becomes more expensive, demand is gradually spreading toward the outskirts. Districts that were previously considered less attractive for rental investment are beginning to draw more buyers and tenants.
How Much Does It Cost to Rent in Baku?
A Vesti Baku market review found the following average monthly rents in older apartment buildings at the beginning of September:
- one-bedroom apartments: 450-500 manats ($265-$294);
- two-bedroom apartments: 600-700 manats ($353-$412);
- three-bedroom apartments: 800-1,000 manats ($471-$588).
Small one-bedroom apartments can still occasionally be found for 400-450 manats ($235-$265). Such properties are usually located in older buildings, have limited floor space and disappear from listings quickly.
In mass-market new developments, one-bedroom apartments generally rent for 600-750 manats ($353-$441). Rates near metro stations, universities and modern residential complexes in central districts often reach 700-900 manats ($412-$529) or more.
During an August review, a one-bedroom apartment near Neftchilar metro station was listed for 400 manats ($235), while similar properties near Memar Ajami and Ganjlik started at approximately 450 manats ($265).
Comparable apartments in new buildings near Azadlig Prospekti, Nariman Narimanov and Inshaatchilar metro stations were listed for 650-700 manats ($382-$412). Prices in some modern complexes approached 900 manats ($529).
Two-Bedroom Apartments Range From 400 to 2,500 Manats
The price range is even wider for two-bedroom apartments.
Individual properties in older buildings and outlying neighborhoods can be found for 400-550 manats ($235-$324). In new developments near metro stations, monthly rents generally reach 800-1,200 manats ($471-$706).
Near the 28 May metro station, two-bedroom apartments in older buildings were listed for approximately 750-850 manats ($441-$500), compared with 1,200-1,300 manats ($706-$765) in new developments.
Premium listings can reach 2,000-2,500 manats ($1,176-$1,471) per month, although these properties do not represent the mass rental market.
Why Affordable Apartments Are Disappearing
The increase is not solely driven by the seasonal arrival of university students. The supply of affordable housing is also shrinking as Baku demolishes aging five- and nine-story residential buildings.
Families displaced by demolition projects are temporarily housed in rental apartments, often paid for by developers. Construction of a replacement building or residential complex typically takes at least 2.5 to three years, keeping those apartments off the open market for an extended period.
If 50 families are relocated from one neighborhood, roughly the same number of rental apartments may be removed from the available supply for several years.
Demolition also reduces the older housing stock that traditionally provided Baku’s least expensive rental options. Apartments built to replace those properties eventually return to the market at substantially higher prices.
Students Add Seasonal Pressure
Students create additional demand in August and September. The most popular locations include the Nasimi, Yasamal, Narimanov, Sabail and Khatai districts, as well as neighborhoods near Elmlar Akademiyasi, Inshaatchilar, Ganjlik, Nariman Narimanov and 28 May metro stations.
Many students try to reduce costs by sharing apartments in groups of three or four. Their choices are nevertheless limited because landlords frequently accept only families, women or female students.
Tenants must also account for agency commissions, which commonly equal 20% to 30% of one month’s rent. If a landlord also requires a security deposit, the initial cost can approach the equivalent of 1.5 to two monthly payments.
No Major Price Decline Expected
Guliyev said a decrease in rental rates was unlikely. Continuing demand from students and visitors, combined with growing investor activity, is expected to support prices.
One- and two-bedroom apartments remain the most liquid properties because they are easier to rent and can usually be resold without a lengthy search for a buyer.
Even after the September rush ends, rents may not return to their previous levels. In recent years, increases introduced before the academic season have often become the market’s new baseline.
A previous Vesti Baku report also found an acute shortage of apartments priced below 500 manats ($294) in neighborhoods with convenient transportation links.
AZE.US