Devaluation Affected Demand, but Not Price at PHM

Paradoxically, pricing policy did not affect primary residence, although in connection with the collapse of world oil prices the Azerbaijan real economy has subsided and prices for many consumer goods have risen.

In July, prices for primary housing market (PHM) remained frozen (minus 0.9%) due to falling demand three times as compared to January. In total since the February devaluation, they declined at 22%, according to the management of the public association Consumers Property Market. This proves once again that the money invested in construction does not belong to businessmen who need a turnover, but to dealers and officials plundering the budget.

The average price per square meter in this segment is approximately $ 1,620 - twice as much as two years ago.

According to estate agent Bayram Abbasov from Ganja, prices in the primary market do not correspond to reality, for two reasons. First, government officials themselves create a market, resettlement of people from the center to the outskirts of Baku, in advance of the high-rise buildings built up on the periphery of the capital, while they themselves control the land becomes more expensive. Secondly, these officials are not threatened with bankruptcy and the collapse of prices, because they are "sitting on the core budget." In addition, officials have also leverage on the primary housing market and construction materials - they have the right not to deliver natural gas to buildings built by their competitors, and recently they have created a committee on "the quality of building materials." This means they are able to declare invalid boards, tiles, fittings, cement - in short, all the way up to the nails, produced or imported not under their "roof".

As for cheap apartments, it is a "merit" of mortgage loans, but to them after the devaluation of the banks have imposed restrictions that all led to a drop in demand for real estate market. It is noteworthy that if in the fall prices for apartments in the Minsk project reach 15%, the prices of apartments in new buildings "stand", or grow, which results from monopolization.

The most attractive areas are still Sabunchu, Khatai and Nasimi districts of Baku, where there are mass demolitions. The total portfolio of buildings in these areas amounted to 2/3 of this market. In other areas of any major changes in the construction sector was observed. The number of construction companies in comparison with the previous month decreased from 129 to 103-x. The most popular are two-bedroom apartments, the percentage was 40.2%, one-bedroom apartments was 30.2%, the remaining 29.6% were 1,4,5 bedroom apartments.

On the quality of construction, the fact that on the results of 2014 the majority of the complaints sent to the Presidential Administration and related to the construction of multi-storey buildings and urban development (according to the investigation of the Department to work with documents and appeals of citizens), was associated with poor control of construction companies. Consumers of Baku, Sumgait and Absheron region complained of the activities of Birlik Insaat, Ulduz, Folklore, ABC, Fuad Ltd, Kamran, Safari-N, Yeni Yasamal, Effect Insaat, Alasgaroglu, AENT-E, HAYAN-E, Class Azko, Badu Kuba , Olimpus-AZ, Cannat, Khamsa, İnsaatchi GM, Golden, Azertikinti ATF, Ideal Insaat, Sahbulag, Abşeron-1, AEK, Khamsa Insaat, Qarachay, Bios, Bayaz, Derechichek, Mega City Holding, Elita-R, Genc, ​​AAF -Insaat, R + R, and construction companies. "

The parameters of the construction can be seen in a recent complaint to the Presidential Administration from residents of the Narimanov district where the company Effect Insaat builds a 17-floor building in the residential area at the address Tabriz 72-74. They have cut the local green spaces and the distance between a dwelling house and the new building is 3 meters, though the norm must be at least 25. --17D-