great city
TRANSCRIPT
Strong capacity to adapt to a changing oil price environment
Despite modest Doing Business Index ratings and more limited inflows of FDI relative to its GDP than in neighbour countries, Azerbaijan has been a star economic performer in the last 10 years. Its growth has been among the highest in the World. GDP of Azerbaijan (USD 75 billion in 2014) is now 4.5 times higher than in Georgia and 6.5 higher than in Armenia
10,1 10,0
8,2
6,5
5,65,0
4,3 4,3
0
2
4
6
8
10
12
Turkmenistan Azerbaijan Uzbekistan Tajikistan Kazakhstan Georgia Kyrgyz Republic Armenia
Average yearly GDP growth 2006-2015 (%, source IMF)
20,9
4,5
-0,5
0,0
-4,4
-8,8 -9,3
-13,0-15
-10
-5
0
5
10
15
20
25
Azerbaijan Uzbekistan Turkmenistan Kazakhstan Tajikistan KyrgyzRepublic
Armenia Georgia
Azerbaijan authorities were fully aware of the limits of their oil-and-gas rent and managed theeconomy accordingly by accumulating unparalleled external surpluses during the oil boom.
For that reason, Azerbaijan was well prepared to the recent halving of oil prices that followed tenyears of bonanza
Average yearly current account balance/GDP 2006-2015 (%, source IMF)
Strongly increasing urban middle-class population
24'449 24'108
18'246 17'761
14'217
9'209 8'681
8'164
5'630 4'998
3'622 2'698
-
5'000
10'000
15'000
20'000
25'000
30'000
Russia Kazakhstan Belarus Azerbaijan Turkmenistan Georgia Ukraine Armenia Uzbekistan Moldova Kyrgyz Republic Tajikistan
Thanks to very strongeconomic growth, GDP per capita in Azerbaijan is nowamong the highest among post-Soviet countries, well above levels of otherCaucasian States
GDP per capita PPP USD 2014 (IMF)
25,626,0
26,527,4
28,228,6
29,029,6
30,831,231,231,3
32,733,033,433,733,7
34,534,8
36,036,236,536,7
37,640,1
42,142,1
43,6
0 5 10 15 20 25 30 35 40 45 50
Ukraine
Slovakia
Belarus
Romania
Bulgaria
Montenegro
Kazakhstan
Serbia
Tajikistan
Slovenia
Hungary
Armenia
Poland
Moldova (Republic of)
Kyrgyzstan
Croatia
Azerbaijan
Albania
Latvia
Estonia
Bosnia and Herzegovina
Mongolia
Uzbekistan
Lithuania
Russian Federation
China
Georgia
The former Yugoslav Republic of Macedonia
Meanwhile, economic growth has not been associated with very strong increase in incomeinequality as in neighbour Georgia or Russia.Therefore, the combination of very strong growth and moderate income inequality has led to areduction of poverty unparalleled in the Caucasus and the emerging of a large middle-class
Gini coefficient (2003-2012, UNDP)
9593
6616
4841
0
2000
4000
6000
8000
10000
12000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total population (thsd.person)
population at working age (thsd.person)
Economically active population (thsd.person)
Contrary to other Caucasian countries, the population of Azerbaijan is young and growingeven though birth rates have declined from 25.9 per 1/1000 at the end of the Former SovietUnion to 18.1 in 2014. The age pyramid is ideal with a very high population at workingage/total population ratio which often goes on par with high rates of economic growth
Active population (source AzStat)
1500
1600
1700
1800
1900
2000
2100
2200
2300
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
After initial contraction following the end of FSU, the population of Baku has steadily increased,attracted by jobs opportunities in sectors such as services with white collars middle-classprogressively taking over blue collars farmers or industrial workers.
Dynamics of population growth in Baku(at the beginning of the year, thsd. persons, AzStat)
445
1754
1199
735
670
627
567
530
495
489
480
464
400
374
332
308
298
250
241
198
0 200 400 600 800 1000 1200 1400 1600 1800 2000
Total economy
Mining
Finance
Information and communication
Professional, scientific and technical activities
Construction
Administration
Transportation and storage
Manufacturing
Production, share and supply of electricity, gas and steam
State management and defence, social security
Accommodation of tourists and public catering
Other service activities
Trade
Water supply, cleaning and processing of wastes
Real estate activities
Education
Art, entertainment and recreation
Agriculture, forestry and fishing
Human health and social work activities
In sectors such as finance, wages are much higher than on average and there is still muchpotential for growth in employment as the credit to GDP ratio in Azerbaijan (WB, 2013) is only25.5% against 39.8% in Georgia and 45.2% in Armenia
Average monthly nominal wages and salaries, 2014 (AZN, AzStat)
Unsatisfied demand for middle-class housing
100 103112
131
179164
201
241
284
345
376
100
119
150
180
200211
224 231240
256265
0
50
100
150
200
250
300
350
400
450
500
2004 2005 2006 2007 2008 2009 2010* 2011* 2012* 2013* 2014*
Construction
Mining
Trade
Total GDP
Manufacturing
Agriculture
The Construction sector has been the most dynamic economic sector in the last 10years, together with Oil and Gas.
GDP and sector growth 2004-2014 (index 2004=100, AzStat)
0
500
1'000
1'500
2'000
2'500
3'000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
rural
urban
This strong growth first reflects pent-up demand following a decade of massive under-investment in the 1990s and not a real estate bubble linked to the oil boom: while there hasbeen very few investments in real estate financed by abroad, the total credit portfolio of banks inconstruction and real estate was, according to CBRA, only 2.7 bn USD in mid-2015
Dwellings houses submitted into use by type of locality (source AzStat)
0,70,8
1,0
1,7
1,5
1,9
1,61,7
2,0
1,5
2,0
1,8
2,22,3
1,9
0
0,5
1
1,5
2
2,5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
As of today, levels of construction per capita still remain much lower than in Soviet times and are insufficient to deal with the needs of the strongly developing urban middle class
Number of dwellings submitted into use per 1000 population (source AzStat )
860 840
10451100
1181
1630
0
200
400
600
800
1000
1200
1400
1600
1800
2010 2011 2012 2013 2014 2015
In 2015, the Baku housing market was faced with the combined impact of the devaluation and oflower GDP growth. It led to much lower USD prices for the secondary market (by more than30%). But prices in the primary real estate market remain almost unaffected, partly becauseprime quality real estate is a good storage of value in times of uncertainty.
Dynamic of prices on primary real estate market in Baku (mbagroup.az)
Robustly sustainable real estate market prices
In the future, Government schemes favoring access of the population to property of real estate will keep on sustaining market development.
Azerbaijan has already approved the law on mortgage lending.
Currently interest rates in AZN are:
4% - for public servants (through the Azerbaijan State Mortgage Fund)
6% - for other categories of population (through the Azerbaijan State Mortgage Fund)
8% - for other categories of population (through commercial banks)
From January 2016:
Additional AZN 200 million were allocated to the existing quota of AZN 600 million for theAzerbaijan State Mortgage Fund
The individual ceiling for subsidized mortgage credits will be increased up to 100 000 AZN
Interest rates will be reduced to :
- 2% - for access to property of young borrowers
- 3% - for public servants
Sales conditions
City center
Near the center
Far off from the center
Outskirts of the city
1800 - 5000 USD
1500 - 3000 USD
1200 - 2000 USD
450 - 1500 USD
Great City Construction Project
Price per 1 m2:
Prices in Baku depend on locations in four different circles.The Great City Project is located in the 2-nd best circle whose prices are in a 1,500/3,000 USD bracket.
Price specificities in primary real estate market in Baku
Summary of the Project
• The Great City Project is one of the biggest construction projects in the Republic ofAzerbaijan on a territory of 10 ha close to the center of Baku
• It is implemented in close coordination with Nikoil Bank that participates in State supported programs for housing and that will provide buyers with cheap mortgage finance
• Its main goal is to supply affordable and comfortable housing for the Baku middle-class
• Construction is capped at 4 floors, which is a very popular type of residence among the middle-class even though currently most new buildings are much higher
• The project includes 60 residential buildings and all infrastructure facilities
• Only 2 km from the city center
• Only 100 m from Heydar Aliyev Avenue, the backbone of modern urban development of Baku on the way to the airport and… beaches!
Location of the project site: at the center of high paid jobs location
Our neighbors:
• On photo 1 a new hospital within walking distance from our residence: jobs and services
• On photos 2 and 3, top market office towers, located just opposite from Great City residence. Headquarters of national oil company SOCAR, AZERSU (State Water Supply Company), Central Bank of Azerbaijan, State Oil Fund…
• No traffic jam to go to your well-paid job in flagship institutions!
1 32
• 960 flats with total area 96’000 m2
• 1-2-3-4 bedroom apartments
• Size of apartments from 91to 260 m2
• Ceiling height of 3.3 m
• Large halls
• Each apartment will have a guest toilet
• Each bedroom will have a separate bathroom
Providing the highest building standards at affordable prices
school
health center
artificial lake
kindergarten
residential buildings
infrastructurefacilities
supermarket
restaurant
Organization of the residential complex: make life comfortable
• The Great City Residential Complex is a Green concept withgardens, playgrounds and even an artificial lake
• A private water cleaning system will be installed, providing highquality potable drinking water, an exception in Baku
• All the territory of the complex will be securely fenced, with asecurity checkpoint at the entrance of the courtyard and of theparking. Green life will be a privilege
A Great Green City
If interested…
14 rue du Rhone w 1204 Genève w Switzerland w tel. +41 22 900 1705 w [email protected]
Connect with us:
O2 Holding SA
rue de Rhone, 14 – 1204 Geneva (CH)
Tel +41 22 900 1705
Fax +41 22 900 1706
Mob +41 79 777 62 99
E-mail: [email protected]