Report: Real estate prices will rapidly decline in Azerbaijan

Baku. 5 August. REPORT.AZ/ Rapid decline is expected in property prices due to fall in decrease in real incomes of the population in Azerbaijan.

Analytical Group of Report News Agency considers that decline in property prices will be observed both in national and foreign currency. However, property prices declined to a lesser extent in local currency due to fall in AZN exchange rate, while this decrease will be sharply observed in USD.

Reason of gradual decline in property prices is that pensions and salaries haven't been increased after last two devaluations or decrease in real income due to slight increase. Moreover, as a result of dependence on imports, large part of the population's income is directed to purchase of imported products and its prevention is almost impossible.

Another reason of drop in property prices is fall in rental prices due to decline in economic activity. Analysts of Report News Agency consider that monthly AZN rental in the center of the capital decreased even by 65%. Currently, reduction of rent is being observed and it will result in decrease in property prices.

Analytical Group of Report News Agency forecasts that firstly, prices of the properties of 2nd degree importance - cottages and plots of land for construction of cottages - will decrease: 'Taking into account high cost of cottages, people will sell the plot of land in that area. Secondly, a certain part of the population, which income declined, is expected to sell its property, purchased during the period of high economic growth. All of these factors give grounds to say in the medium term, significant decrease is expected in real estate prices'.