Reduction of construction work expected

/By AzerNews/

By Amina Nazarli

A reduction of construction work is expected in Azerbaijani residential sector in 2015, said Nusret Ibrahimov, Director of "MBA Group" consulting company.

According to Ibrahimov, the reason lays in the fall of oil prices on the global markets.

Unstable economic state in Russia, continued due to Western sanctions, also led to a reduction of investments in the housing market in Azerbaijan.

Ibrahimov noted that in the last three-four months there has been a decline in the country’s real estate market. The trend contributes to the inevitable decline of prices, he said.

“Every month we are observing a price decline by 0.5-1 percent. The activity in this field fell by 35-38 percent over the past two months compared with the same period last year,” Ibrahimov said.

In the first half of 2015, the activity will remain at the same level. In the second half, a revival is expected. “However, I suppose that the real estate’s price will fall at 8-10 percent during the year,” he noted.

This year small construction companies and private investors may leave the real estate market, he said. “It is not expected in the first half of 2015, but, likely by the end of the year the volume of construction would be reduced. However, financially stable companies will continue operations.”

In 2014 the volume of construction work in Azerbaijan constituted 8,283 million manats ($10,553 million), according to the State Statistics Committee,

Some 63.8 percent of the total construction work are related to the reconstruction and expansion, 17.2 percent - overhaul, six percent - current repairs and 13 percent to other constriction work.