Real estate prices will decline in Azerbaijan

This will occur against the background of reducing the level of population savings

Baku. 11 October. REPORT.AZ/ Prices at automobile market of Azerbaijan expected to rise next year, while housing and land to get cheaper.

Analytical Group of Report News Agency predicts that the last increase in customs duties will affect the car market. In addition, appreciation of the dollar and corresponding increase in imports will also affect their cost.

In 2017, real estate will fall in price by a decline in real incomes, "The real incomes of the population are reduced due to the increase of imported goods in manat equivalent, increasing utility costs. Cuts in public sector investment for next year by 1.14 bln AZN, or 38%, along with the cash money supply, will have an impact on economic growth.At the same time foreign investment reduction factor due to the global financial crisis will have an impact on the decline in revenues. The budget also provides for reduction of the defense, utilities, as well as on the culture around 1 bln AZN."

"These factors will reduce the level of public savings. 

As a result, there is stagnation in the real estate sector. If real estate prices in last two years have not become cheaper at the expense of the public expenditure accumulated during the oil boom, starting in 2017 we will witness the completion of this trend", analysts said.

The experts of Report News Agency predict depreciation of real estate at 10-15% in case of preservation of the dollar in the range of 1,60-1,70 AZN/USD and 5% growth rate up to 2,00 AZN/USD: "In connection with the situation on the global financial market, property prices will fall even more, and car prices will rise in line with the appreciation of the dollar."

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