AZE.US
Sales of expensive apartments in Baku have slowed over the past two months, with most buyers focusing on homes priced at no more than 200,000 to 210,000 manats, or roughly $118,000 to $124,000.
Demand has weakened particularly for apartments priced above 300,000 manats, or about $176,000, forcing some owners to offer significant discounts.
Real estate agents said newly built apartments around the Gara Garayev metro station and the 8th Kilometer area that were initially listed for 330,000 to 350,000 manats – approximately $194,000 to $206,000 – are taking longer to sell.
Some owners have reduced their asking prices by 15,000 to 20,000 manats, equivalent to roughly $8,800 to $11,800.
One apartment originally listed for 450,000 manats, or about $265,000, was discounted by 50,000 manats to 400,000 manats, or approximately $235,000. The property has still not found a buyer.
Another owner lowered the price of an apartment from 350,000 manats to 330,000 manats after failing to complete a sale.
The figures do not indicate a market-wide decline in housing prices. Instead, they reflect seller discounts in the higher-end segment, where available supply currently exceeds the number of buyers able or willing to pay.
Why Buyers Prefer Homes Below 200,000 Manats
Real estate expert Elnur Farzaliyev attributed the slowdown to both seasonal factors and buyers’ reliance on mortgage and credit financing.
According to Farzaliyev, more than half of Azerbaijan’s real estate transactions over the past five years have involved mortgages or other financing arrangements.
Because many lending programs effectively concentrate on properties priced at up to 200,000 manats, demand is strongest within that range.
Some buyers accumulate approximately 150,000 manats, or around $88,000, in personal savings and finance the remaining amount through a loan. This makes apartments priced near 200,000 manats the most accessible part of the market.
The pool of potential buyers becomes considerably smaller for properties costing between 300,000 and 500,000 manats – approximately $176,000 to $294,000 – giving buyers greater leverage to negotiate.
Farzaliyev expects activity in the housing market to begin recovering in late September.
Prices could resume rising in the longer term because of increasing construction costs and a shortage of suitable land for new high-rise residential developments in Baku.
AZE.US