BAKU, Azerbaijan, October 4. Housing prices in Azerbaijan have shot up by a whopping 46 percent over the last five years.
Data obtained by Trend from the Central Bank of Azerbaijan (CBA) indicates that an increase has been observed in both the primary and secondary housing markets. After riding the wave of relative stability during the pandemic in 2020, the market has been on a steady climb in the years that followed.
The CBA noted that in the first half of 2025, rising housing prices, combined with higher average interest rates on new domestic mortgage loans, have slightly reduced housing affordability.
Additionally, positive dynamics in disposable income have helped the affordability index remain above benchmark levels. In Baku, the median monthly rent for apartments stood at 883 manats, implying a property capitalization period of about 22.5 years, while the ratio of average house prices to the average nominal monthly salary (in Baku) is around 217 months, or 18.1 years.
Investments in the construction sector have been on the rise, especially in residential projects, which are carving out a bigger slice of the total fixed capital pie. The increase reflects strong demand and new projects undertaken by both the public and private sectors.
“Overall, the recovery of investment flows, ongoing construction activity, and the continuation of the state-led formalization of undocumented homes are expected to sustain high activity levels in both the construction sector and the real estate market,” the report reads.
The regulatory framework governing housing prices in Azerbaijan is predominantly shaped by the State Service on Property Issues, operating under the auspices of the Ministry of Economy. This entity is tasked with the oversight of property rights, real estate valuation methodologies, and land management protocols, alongside the operational directives of the State Housing Construction Agency. Although the government does not directly dictate market valuations, these entities execute frameworks that influence the real estate sector, especially via the allocation of subsidized housing and the oversight of property-related protocols.
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