Azerbaijan to modify housing market

By Vusala Abbasova - AzerNews 

The Government of Azerbaijan will discuss the issue of providing citizens with government-sponsored housing during the autumn session.

These measures are aimed at supporting citizens receive adequate housing without a mortgage, a service popular among newlyweds.

As many as 80,000-85,000 people get married every year and not all meet the salary requirements to obtain mortgages.

"The government should pay special attention to providing citizens with social housing on a legal basis or at least on concessional terms," Trend quoted the deputy chairman of the parliamentary committee on social policy Musa Guliyev.

Azerbaijan could adopt a popular model used worldwide for providing citizens with long-term social housing based on the signed rental agreement, Guliyev believes.

This model functions like rent, but the difference is in the rights to property. The service allows the resident to pay to own the apartment at about 200-250 manats (over $190-240) a month over 20-25 years.

He also proposed to create a fund for constructing social housing, a part of which will be provided by the government.

Moreover, there are favorable conditions in the housing market for those who wish to buy an apartment at low price.

The average price for secondary housing fell in the current year due to the weakening of purchasing power among the citizens of Baku stemming from a depreciation of the manat by roughly 34 percent since February 2015.

The number of proposals in the secondary housing market in Baku dropped by 12 percent from 1,590 proposals in June to 1,397 in July, according to the MBA Consulting Company, which compared the prices in the secondary housing over the past two month.

The purchasing power in the housing market reduced 35 percent in 2015 compared to the previous year.

Ups and downs in global commodity markets against the background of Western sanctions on Russia, falling oil prices, and the appreciation of the dollar were expected to affect first of all the property market.

The strong decline in world oil prices and as a result and the resulting decrease in the volume of petrodollars significantly affected Azerbaijan, where the price of the manat is determined by cash flows from oil and gas exports and about 95 percent of export earnings in the energy sector.

Therefore, buying a house when there is a fluctuation in the manat rates has become excessively risky.

As a result, housing prices per square meter decreased by 0.43 percent at the secondary market in Azerbaijan in July declining from 1,627 AZN (or $ 2,075) in 2014 to 1,669 AZN (or $1,605) in 2015.

As many as 54 percent of the proposals on the market were made mainly in the Nasimi, Narimanov, and Yasamal districts of Baku during that period.

The share of the houses with a cost up to $1,500 per a square meter (with an average price of $1,188) amounted to 43 percent of total sales portfolio in the secondary market of Baku in July.

Some 39.4 percent of the total volume of sales was accounted for by apartments with a cost of $1,500-2,000 per a square meter (with an average price of $1,739).

The share of apartments with a price of $2,000 per square meter (with an average $2,320) made up the last 17.6 percent of the total sales volume of current year, according to the report.

Summarizing the sales among the secondary housing in July, apartments near 28 May metro station with four rooms and 160 square meters were the most expensive, costing $656,000, while the cheapest apartments had 72 square meters in Masazir settlement with the price of $41,760 ($580 per square meter).