The real estate market in Azerbaijan continues its upward trajectory, with housing prices rising 12.7% in January–September 2025 compared to the same period last year, according to new data from the State Statistics Committee.
Analysts say that despite only two price drops in the past two decades, the market remains resilient – and no decline is expected in 2026.
The strongest growth was recorded in the secondary market, where homes sold by private owners rose 12.8%. New-build apartments offered by construction companies increased 12.5%.
Why Prices Continue to Rise
Experts attribute the price increase not to demand surpassing supply, but to deeper structural issues:
Limited competition among construction companies
Fewer construction permits issued over the last 5–6 years
Real estate becoming the country’s primary investment vehicle, drawing capital away from alternative sectors
According to market analysts, the lack of competitive pricing and administrative restrictions on new developments have contributed to steady price growth across both new and secondary housing markets.
Will Prices Fall in 2026? Experts Say No
Despite concerns over the expiration of certain economic incentives beginning in 2026, specialists do not foresee a downturn.
“We are unlikely to see the rapid price increases of previous years, but there is no foundation for expecting a drop,” analysts note.
The market is expected to stabilize, with moderate growth rather than dramatic fluctuations.
Real Estate Remains the Top Investment Choice
The sector’s resilience comes from its role as a safe investment in the Azerbaijani economy. Experts warn, however, that if other investment avenues expand – such as financial markets or technology – interest in property may gradually decrease.
What Will Shape the Market Going Forward
Regulatory environment and government incentives
Pace of construction permits and new project approvals
Macroeconomic conditions and investor sentiment
Emergence of alternative investment options
For now, real estate remains the anchor of domestic investment, keeping prices robust despite global and regional economic uncertainty.
