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Azeri Real Estate Index Market

27 December 2006 17:41 (UTC +04:00)

The Public Union of the Housing Market Participants, a partner of Baku Interbank Currency Exchange, estimates that the first market amounts to USD 3 billion.
Besides the residential real estates, the situation in the office segment or land segment is more complex.
The interest of bank, insurance and leasing organizations, as well as those who want to buy and sell real estates for earning have been doubled in the real estate market.
Not only professional participants but also ordinary people are interested in simple indicators in order to observe the changes and tendencies at market.
These indicators are not enough to give full details of this or that segment of the market, but help monitor the market objectively.
Nikkei, Nasdaq and Dow Jones Indices are often used in the stock market.
Besides, currency exchange rates, oil prices or gold index enable to find a way-out from situation and take precautions.

Azeri Real Estate Price Index

The average price of the housing market is widely used whereas it is not always successful at all. The average price is raised by the expensive houses in the list. The more expensive residential properties the list includes, the higher the average price will be.

Real Estate Yield

Thatâ€™s why the average price has a character of fluctuation for months.
The BICEX raised this question and started developing real estate index.
It is necessary to find the price of one square meter of residential real estate and its growth dynamics in order to fore see the profitability in future. Real estate index is an instrument that helps to solve problems in this field. The BICEXâ€™s date base and collection of information since 2002 are very praiseworthy. The calculating technology of the exchange and its partners ensures the updating of the indices daily. But inert situation in the market doesnâ€™t require often updating of the indexes. Monthly updating is considered enough.
The information as of February 1, 2002 - Azeri Real Estate Index basic indicator is in the level of 100. Reality agencies includes the information into the date base for the following criteria.
The number of orders to the agency by customers should exceed 200 a month.
Average monthly deals should equal to 10% or 15% of the orders.
Azeri REI doesnâ€™t include the reports ignoring these criteria into its calculating base.
Azeri REI index, developed by the BICEX and its partners includes foreseen indices approximately set by the price dynamics. These indices allow forecasting the price two or three month in advance if there is no sharp fluctuation in the market.
The market investors are also deeply interested in the yield (profitability) index of the residential real estates. The yield index can be determined by the calculation of the interest rate of the potential profitability of the given real estate.
BICEX, as a source of analytical information about real estate market, expects the professional market participants to accept the indexes. Implementation of the national mortgage lending program showed that banks, insurance companies, appraisers and other market participants compare the internal accounts with the indicators of the BICEX.
It says that the Azeri REI will attract more attention in the nearest future. /APA/