Azerbaijan.US
For many years, Baku’s real estate market was defined by steady price growth. In some periods, annual increases reached 10 percent and, at times, even 20 percent. However, experts say the market entered a new phase in the second half of 2025, as price growth slowed and signs of stagnation became increasingly visible.
In other words, the long-standing upward trend has weakened, giving way to a more cautious and selective market dynamic.
Real estate expert Elnur Azadov told local media that despite the slowdown, property prices are expected to continue rising in 2026, albeit at a more moderate pace.
According to Azadov, until December 2023 the market experienced sharp and, in many cases, atypical price growth.
“By the end of that year, mortgage lending limits were exhausted and loan issuance was temporarily suspended. This immediately affected market activity,” he said. “As a result, in 2024 and 2025, price growth and overall market dynamics largely stabilized at similar levels.”
Why Baku Remains the Price Leader
Azadov notes that Baku, as the capital, remains the country’s main price-forming center. High population density and sustained consumer demand continue to push prices higher than in other regions.
The second tier includes Sumgayit, Khirdalan, and the Absheron Peninsula as a whole. These areas maintain strong geographic and economic ties with Baku, resulting in elevated prices and noticeable fluctuations driven by supply and demand.
Primary Market Constraints
One of the key pressures on prices, according to the expert, is the sharp reduction in construction permits issued in recent years. With fewer new projects entering the market, competition in the primary housing segment has dropped significantly.
“As competition weakens, developers are offering remaining apartments at prices 15 to 20 percent above the average market level,” Azadov said.
Which Segments Will Rise the Most
Overall price growth, he added, varies by property type. The strongest increases are seen in apartments and private houses, where demand remains consistently high.
Looking ahead to 2026, Azadov disagrees with analysts who predict price stabilization or declines.
“There are no real prerequisites for prices to fall,” he said. “In 2026, the upward trend will continue, especially in the mid-price segment.”
The most noticeable growth, he expects, will occur in properties priced at 200,000-250,000 manats and 250,000-300,000 manats, covering both apartments and individual homes.
Experts believe that while Azerbaijan’s real estate market is entering a more restrained phase, prices are likely to keep rising, supported by demand, limited supply, and structural constraints on new construction.
