A noticeable shake-up is unfolding in Azerbaijan’s real estate market, with recent price changes in both the apartment and land sectors drawing public attention.
Buyers and sellers are no longer behaving the way they did even a year ago, and the overall mood of the market has become more fragile as expectations shift on both sides.
According to real estate specialist Elnur Farzaliyev, the softening in several segments is not accidental – and certainly not just a seasonal fluctuation. Speaking to Protest.az, he explained that deeper economic and social factors are now shaping the market’s trajectory.
“Over the past few years, especially in Baku, we saw a sharp rise in property prices,” Farzaliyev said. “The increase was so steep that the market ended up with a serious shortage of real buyers. If you look at the last three to four months, the data clearly shows that the number of real buyers has dropped. And when demand falls, it naturally pushes prices down.”
But price fatigue isn’t the only force at work.
Compensations After Demolitions Are Reshaping Buyer Geography
Large-scale demolition and redevelopment projects in Baku and surrounding districts have also shifted market dynamics. Residents whose homes were acquired by the state receive compensation – and many of these families look to the Baku suburbs for their next home.
“In areas like Yasamal and the historic ‘Sovetski’ neighborhood, apartments tend to be small,” Farzaliyev noted. “The compensation they receive is usually enough to buy a property in suburban zones such as Khirdalan or Masazir. This increases demand for individual houses and new developments outside the city center.”
As demand rises in one direction, supply surges in another.
Traffic Congestion Is Pushing Residents Out of Dense Suburbs
Interestingly, the same districts – Khirdalan, Masazir, and nearby settlements – are simultaneously experiencing a wave of homeowners rushing to sell.
The reason? Daily life is becoming harder.
Heavy traffic has turned commuting into a multi-hour struggle for anyone working in central Baku. As Farzaliyev explains:
“People living in these areas may spend several hours a day in traffic. Many families now prefer to move closer to the center, or to parts of the city where commuting is more manageable. This leads to more listings – and more listings mean more competition, which pushes prices downward.”
If Low Buyer Activity Continues, Deeper Price Drops May Follow
Farzaliyev warns that if the buyer shortage becomes long-term, the market could experience more serious price adjustments.
Another factor weighing on prices is the growing popularity of affordable housing programs – both state-funded and private. Social and subsidized housing options draw budget-sensitive buyers away from the conventional market, lowering demand for second-hand apartments.
New Buildings Are the Exception – and Prices There Continue to Climb
Despite the cooling trend, one segment continues to run hot: new developments.
The expert says the explanation is simple:
“Over the last three to four years, the number of multi-apartment buildings under construction in Baku has dropped. When supply decreases, competition among developers falls, and companies put their units on the market at the highest possible price.”
Unless fresh construction picks up or liquidity returns to the market, the broader downward pressure on housing prices is likely to persist.
