Azerbaijan evaluates real estate market

/By AzerNews/

By Nigar Orujova

Azerbaijan will start a new project on mass valuation of real estate until the end of 2015, said Rafig Jalilov, Deputy Chairman of the State Committee for Property Affairs.

"The purpose of this project is to conduct a centralized mass and accurate assessment of the real estate sector from a single center," he said presenting the project on April 9.

Mass appraisal of real estate involves the simultaneous evaluation of a large number of real estate. A pilot project has been implemented in Sumgait.

The project should contribute to the control of the real estate assessment in the country, the deputy chairman said. A special database of evaluated objects will be set up as part of it. This base will be used by banks in mortgage lending, insurance companies for insuring properties, as well as determining sale prices.

The mass valuation of real estate project involves the simultaneous evaluation of a large number of real estate and should contribute to overseeing the assessment of real estate in the country.

The evaluation is based on special mathematical models using a database of real estate, provided by the Justice Ministry.

Seymur Aliyev, Deputy Head of the State Property Register Service, said 170,000 objects have been estimated over the past five years in Azerbaijan. The database is enriched by 5,000 objects every month.

The mass assessment will be undertaken under the project on real estate registration, implemented with the financial support of the World Bank. The project cost stands at $38.57 million, for which the share of WB loan accounts for $30 million.

The Azerbaijani government and the WB have signed an agreement aiming to create a single real estate cadastre system in July 2007. The project consists of four components - registration of real estate, management and register of state property, base cartography and land cadastre, training, policy development and project management.

After some re-organization, the project designed for 2008-2012, has been extended until October 2015.

There are some concerns that the project may affect the real estate market. However, CEO of consulting company "MBA Group" Nusret Ibrahimov believes the project will not affect properties' market value in the country.

The evaluation is carried out after the formation of the market value and based on it, so it can not have any impact on the market value, he assured. “But it will identify and prevent fraud during purchase and sale.”

Ibrahimov also noted that the project will not lead to the elimination of independent appraisal companies.

"Of course, the project will reduce the amount of work of appraisal companies and cause healthy competition, which in turn will push appraisal companies to improve on their performances. But by no means will it lead to the termination of independent evaluating companies," he said.