Reasons for the Increase in Real Estate Prices

In Baku in 2024, there has been an observed increase in real estate prices. From February until now, due to the increased interest in private houses, we see a 1.4% increase in the prices of individual houses and land plots. In contrast, the demand for apartments in residential buildings and non-residential properties has not changed. There has been a recorded monthly price increase of 0.9% in apartments in residential buildings and 1.3% in non-residential properties.

Main Reasons for the Increase in Real Estate Prices

Real estate expert Elnur Farzaliyev stated that for many years, as demand has increased in Baku, Sumqayit, and other major cities, there have been observed increases in real estate prices. If we analyze the prices of previous years, we can see that prices have increased by 10-15, sometimes even 20 times. This increase depends on three factors: 1) global processes, 2) the country's economic incomes, and 3) the increase in demand.

Additionally, when demand is high and supply is low, price increases occur. The limitation of land plots for the construction of both individual houses and multi-apartment residential buildings affects their sale prices. Naturally, this also increases construction costs.

Documented and Undocumented Properties

In general, real estate is divided into documented and undocumented properties. Today, documented properties in our country are more expensive than undocumented ones, but the demand for them is higher. Furthermore, the sale of documented properties through credit and mortgage increases their demand, which makes price increases inevitable.

How Long Will the Price Increase Continue?

Price increases will be more noticeable until the end of the year. As June, July, and August approach, price increases will manifest in land plots, summer houses, and individual houses. In the colder months, demand is higher for apartments in residential buildings. This process will approximately start from the end of August to the beginning of September.