Azerbaijan.US
Housing prices in Azerbaijan are expected to continue rising in 2026, although the pace of growth is likely to remain moderate as the real estate market enters a period of adjustment, experts say.
For several years, Baku’s property market saw steady price increases, in some periods reaching 10-20 percent annually.
However, analysts note that since the second half of 2025 the market has begun to show clear signs of stagnation, driven by declining buyer activity and affordability constraints.
Real estate expert Elnur Farzaliyev says the market is currently being sustained less by direct cash purchases and more by mortgage lending and internal installment programs offered by construction companies.
“In recent years, sharp price increases have significantly reduced the pool of buyers,” Farzaliyev said. “Today, most transactions involve buyers relying on credit-based mechanisms rather than full upfront payments.”
Another factor reshaping demand is the ongoing demolition and redevelopment projects in central Baku, which have shifted buyer interest away from the city center toward peripheral districts. According to experts, the declining number of new residential projects in central areas has weakened competition and kept prices artificially high.
At the same time, analysts stress that a sharp correction or collapse is not expected. While buyer interest has cooled, supply constraints and financing mechanisms continue to support prices.
Experts believe the market is moving into a more balanced phase, where price growth persists but at a slower and more selective rate, depending on location, project quality, and payment terms.
