Prices for SHM More Relevant to Market than in New Buildings

In July, in Baku and in other major cities of Azerbaijan prices in the secondary housing market (SHM) decreased on average by 1.8%, as compared to the same period last year - by as much as 32%.

According to expert estimates, at present, the average price index in the SHM is $ 1 thousand. 280 per 1 sq. meter. Basically, certain demand is for 1-2 room small apartments in homes built by Minsk and Leningrad projects in the upper part of the Yasamal, Narimanov, Nizami, Nasimi and Khatai districts. Prices in this segment are $ 700-800 for an average housing repairs and long-inhabited districts ("old neighbors"). By the way, the proportion of homes valued below the average level is generally 55% of the portfolio of brokers.

One of the important factors influencing the decline in prices is the volume of proposals. Against the backdrop of the price after the February devaluation their number has increased by half - people are afraid of a second wave of sudden drawdown of the manat and impairment of property, so they are trying to sell their apartments and take other, cheaper ones to keep on hand a small dollar capital from the difference in price.

In July decreased demand for 4- and 5-room apartments, especially in the 5-room, but the demand for 1, 2 and 3 room homes increased. Accordingly, prices increased for 1 and 2 room apartments, 2-room apartment prices increased by 2%. The average cost of one-bedroom apartments was $ 65 thousand and two-room apartments were $ 102 thousand, which is still inadequate in the present economic situation.

Lowering the price of SHM experts explain the sharp increase in supply, the activation of the early years of mortgage lending, as well as the demolition of housing and the purchase of new housing on the outstanding payment.

Ongoing studies show that SHM, in contrast to the primary market, where prices are "worth" in view of the monopoly, there is opportunity to negotiate, exchange, indicating the presence of market mechanisms.

In August, according to forecasts, there will be more activity on SHM. Prices remain stable, although there will be a tendency towards growth. --17D-

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