Pursuant to the Presidential Decree "On Measures to Eliminate Monopoly and Privatize the Construction Sector", dated 2 December 1997, the state monopoly in the construction sector has been eliminated, and private persons may now engage in construction activities.
The above measures along with overall economic development led to a booming real estate market. A number of local and foreign developers are active in the field. The hot spot of the market is undoubtedly capital Baku city. The 2004 growth in construction sector of 37% is largely attributed to the increasing opportunities on this market. It is increasingly competitive though there are certainly opportunities for newcomers in luxury apartments, guest houses management and international sales areas.
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As for the law "On the Basics of City Construction" foreigners and foreign legal entities may engage in construction works in Azerbaijan only in conjunction with Azerbaijani nationals or legal entities. Azerbaijan is a booming construction market. There are several reasons behind the rapid development of the business in Azerbaijan in the last few years. The major one is the large capital investment in local infrastructure related to oil and gas projects.
As a result this business area has evolved into a very competitive sector with a number of strong companies able to deliver the highest international standards in construction.
The sector is growing year by year. Substantial increases in business and residential construction have been registered since the late 1990s in response to the growth of both commercial and household purchasing power.
With the growth of demand for better living conditions the real estate prices in Azerbaijan are increasing on yearly basis. Because the income of the population is growing with the state and industry development, the demand for new construction has been increasing. However, the construction growth is also observed in agricultural, transport and industrial sectors, which are the results of positive economical reforms and target programs carried out by the Azerbaijan government, for developing the non-oil sectors.
As market research in the field shows, there are currently significant opportunities to introduce state-of-the-art construction technology in Azerbaijan, as well as in architectural and engineering services, the production of high quality building materials and so on.
