Rental housing market not keeping up with demand

Rental housing market not keeping up with demand

Economy
06 September 2019, 13:04 194
"...It is as if the quota for 2 bedroom apartments in the city center is set at no less than 300-350 manats. It is true that many associate this with the start of the academic year and arrival of students but that is not the case. It was the same case when we were searching for an apartment in May and June. People want to rent homes close to their workplace and students close to their universities. However, they are forced to move to suburban areas due to high prices. But let me also note that I have not noticed any significant differences in the prices in the city center and suburbs. Even when apartments are 50-100 manats cheaper in the suburbs, when calculating the cost of commuting from the suburbs to the city, it adds up to the rental fees in the city. I would also like to add that out-of-town homes that are furnished and renovated are the same price as houses in the center. In other words, in these areas a quality home is offered for 300-350 manats,” Aysel Aslan, a tenant told Kaspi.
Aysel is currently living in Bilajari as she cannot find a suitable home in the center. She complains about the cost of renting apartments, as well as the lack of rentals. "The interesting part is that whenever you call the numbers on the sites that list rental houses, they say the house has already been rented out. They say the same thing even when calling numbers for ads that have been up for just 5-10 minutes. I was very surprised. Apparently, there is a real housing shortage in the market, or it is a game played on citizens to raise the prices.”
In fact, many of Aysel’s points are problems that many people face. Since the school year is starting soon, the rental housing market is on the rise. Many complain about not being able to find a home for a suitable price. Those who cannot find a decent home in the center are forced to move to the suburbs which in turn affect the rental housing market in these areas. Taking into account the topic’s relevancy, we learned expert opinions on this case.
 
Real estate expert Nusrat Ibrahimli said the demand and prices in the rental housing market differ by area. "There is active movement from the city center to the suburbs. The arrival of students revives the rental housing market in late August and September. Generally, students are the main tenants of the rental housing market. Construction work underway in the capital has also affected the rental housing market. Over the past few years, people are renting houses in areas, such as Yeni Yasamal, microdistricts, Badamdar due to reconstruction work in formerly favoured places, such as "Sovetsky, Khutor, Kubinka, Alatava.” There are also those who are interested in renting apartments in newly built buildings but it depends on the building’s location. High expenses of newly-built buildings often times do not meet the needs of the general student body. In this regard, students are moving away from nearby areas to ones faraway. For instance, previously students were not interested in areas such as Ahmadly and 20th Area. However, the situation has changed lately. Demand for the rental housing market has shifted from downtown areas to the suburbs which have an effect on prices,” the expert said.
 
According to the Director of the Expert Center for Real Estate Ramil Osmanli, problems in finding low-cost homes in both the capital and suburbs has expanded. "The implementation of urban planning and infrastructure projects, at the same time reconstruction work in some areas, not to mention the implementation of pilot projects in recent years, as well as the narrowing supply portfolio, all have increased the demand for rental housing. In other words, it is an inevitable fact that demand for rental housing has grown significantly in recent years. As a result, the problem of finding cheap housing in the center of the capital and in the vicinity has expanded. The increase in tourists coming to the country in recent years has also caused increased rental fees in the center. There are even those who rent homes for a day. Of course, all of these factors influence changes in the market’s pricing policy. In this case, students lose access to rental housing in the center,” noted the director.
R. Osmanli also touched upon the supply and demand issue in the housing market. "Of course, the surge in prices, increase the demand for cheap housing among the citizens, in return there is a decrease in supply. That is why some individuals turn suburban rental housing into a private business. But they are not officially engaged in this business. For example, a person builds a 12 bedroom private apartment building at his own expense and leases it to 10 or 12 students. Thus, the rental market expands beyond the city center,” he said.
 
When asked about the prices of rental apartments in suburban areas the director noted that when speaking about the outskirts they do not mean areas, such as Mashtaga, Bina, Mardakan. "Of course, there are also students who rent houses in these areas and go to class every day but they are not many. When we mention the outskirts we are talking about the microdistricts. Previously it was possible to find homes for 200 manats in the microdistricts but now prices start at 250 and 300 manats. At the same time, the cost of single bedroom homes in areas, such as Kubinka, Montin and Yasamal was 150 manats, and today the figure is 250 manats. Of course, prices change depending on house renovation, communal conditions and location,” the director said.
The director also clarified the issue regarding listings on rental housing sites. "The nuances mentioned are quite real. In other words, this is not a game of deception to increase prices, but a real indicator. Because advertising on those sites cost money and I don't believe anyone would pay for false advertisment. Today, the demand for rental housing truly is high. In this sense, houses can be rented as soon as they have been listed,” he added.
 
Gunel Azade