Review of construction sector in Azerbaijan (january-july 2015)

The volume of construction work decreased by 21.15 percent and hit 3.58 billion manat in Azerbaijan in January-July 2015 compared to the same period of 2014, according to the Azerbaijani State Statistics Committee.

Some 65.5 percent of the total volume of construction work accounted for primary construction, reconstruction and expansion, 17.3 percent - overhaul, 5 percent - current repair and 12.2 percent - other construction work.

Around 168,840 square meters of housing were commissioned in July 2015 compared to 161,840 square meters in the same period of 2014.

Around 1.04 million square meters of housing have been commissioned since early 2015 or by 5.43 percent more than in the same period of 2014.

Primary housing market

The average price per one square meter on Baku's primary housing market was $1,036 (1,087 manat) in July 2015 or by 7.17 percent less than in the previous month. The prices in manat decreased by 7.12 percent.

For comparison, the price per one square meter on Baku's primary housing market was $1,116 (1,170 manat) in June 2015.

Most of supply on the market relates to the economy-class apartments (up to $ 1,000 per square meter) and middle class ($1,000-$1,500). The share of apartments in this price range is 53.6 percent and 38 percent of the total portfolio of supply. The average price per square meter in these apartments is $765 and $1,195 respectively. The share of apartments worth more than $ 1,500 per square meter is 8.4 percent. During the reporting period, the average price on such apartments was $ 2,145 per square meter.

Last month, the largest number of residential buildings was built in Yasamal, Nasimi and Khatai districts of Baku. Some 64.1 percent of the entire supply accounted for them.

Thus, 32.8 percent of housing put up for sale on the primary market accounted for Yasamal district of Baku, 20.3 percent - Nasimi, 11 percent - Khatai, 8.3 percent - Binagadi, 7.3 percent - Narimanov, 5.7 percent - Absheron, 5.2 percent - Nizami, 4.7 percent - Sabail, 2.6 percent - Sabunchu, 2.1 percent - Surakhani.

The average area of ​​apartments offered in July decreased by 8.6 percent up to 113.58 square meters. The average area of ​​one-room apartments was 56.4 square meters, two-room - 90.54 square meters, three-room - 128.7 square meters, four-and five-room - 185.4 and 190 square meters.

The average price per square meter on the primary housing market in Baku's districts is as follows:

Secondary housing market

According to MBA Group consulting company, the average price per square meter on the secondary housing market of Baku in dollars decreased by 0.43 percent and hit $1,605 in July 2015, while in manat - by 0.43 percent - up to 1,669 manat compared to June.

For comparison, the price per square meter on the secondary housing market of Baku in July 2014 was 1,627 manat ($2,075).

A decrease in prices can be connected with the weakening of the population's purchasing capacity. During the reporting period, the volume of supply on the secondary housing market of the capital decreased by 12 percent. There were 1,590 offers in June. But in July it dropped to 1,397. The number of offers decreased by 35 percent compared to July 2014.

Most of housing was put on sale in Yasamal, Nasimi, Narimanov districts of Baku. Some 54 percent of total supply accounted for these districts.

According to the report, the houses with up to $1,500 per square meter (the average price - $1,188) accounted for the main part of the sales portfolio on the secondary market of Baku in July. Some 43 percent accounted for them. The apartments ranging $1,500-2,000 per square meter (the average price - $1,739) accounted for 39.4 percent of the total sale volume. The rest (17.6 percent) accounted for the share of apartments with more than $2,000 per square meter (the average price - $2,320).

The most expensive apartment on the secondary housing market was observed near "28 May" metro station in July - a four-room apartment (160 square meters) worth $656,000, the cheapest apartment - in the new building in the Masazir settlement (72 square meters) worth $580 per square meter.

The average market prices per square meter in Baku's districts in July 2015 are as follows:

According to the index of activity, the most attractive districts of Baku in July were Nasimi, Yasamal and Narimanov. In the reporting period, the price index reduced by 0.03 points - to 7.13 points on the secondary housing market.

Construction material market

The companies engaged in building material production in Azerbaijan, produced goods worth 272.3 million manat in January-July 2015, or 14.8 percent more than in the same period of 2014, according to the Azerbaijani State Statistics Committee's report.

During this period, Azerbaijan produced 1.62 million metric tons of cement (a 2.4-percent decrease versus the same period of 2014) and 108,100 metric tons of gypsum plaster (a 0.4-percent growth), the report said.

Azerbaijan also produced 617,400 metric tons of ready-mixed concrete (a 37 percent decrease), 259,900 metric tons of asphalt (a 44.7 percent growth), 12,700 cubic meters of precast concrete building structures (a 31.4 percent decrease), 7,220 metric tons of processed marble, travertine, alabaster and items made of them (a 3.2 times growth).

The construction work volume decreased by 21.15 percent and hit 3.58 billion manat in Azerbaijan in January-July 2015 compared to the same period of 2014, according to the Azerbaijani State Statistics Committee.

Some 65.5 percent of the total volume of construction work accounted for primary construction, reconstruction and expansion, 17.3 percent - overhaul, 5 percent - current repair and 12.2 percent - other construction work.