TODAY.AZ / Business

Investing in European real estate market profitable

30 January 2015 [11:03] - TODAY.AZ

/By AzerNews/

By Aynur Karimova

“The best investment on earth is earth.” Louis Glickman.

Real estate is the safest kind of investment in the world. It cannot be lost or stolen, but, if needed, one can sell his / her real estate for good money.

In recent years, with the development of Azerbaijan’s economy, the country’s citizens have started investing in real estate markets of various foreign countries. They usually purchase real estate for business and living purpose.

Recently, a favorable prospect has appeared for Azerbaijani citizens who wish to invest in the European real estate market. Head of the consulting company ‘Value and Sources’ Rashad Aliyev believes this is mainly due to the stability of Azerbaijan’s national currency manat.

“The exchange rate of manat to the U.S. dollar is stable. This, in turn, means that the depreciation of euro against dollar occurs in parallel with its depreciation against manat,” he told local media.

He noted at the end of June last year, the exchange rate of euro against the U.S. dollar was around 1.37.

“After the decision of the European Central Bank on the launch of quantitative stimulation program, EUR / USD reached 1.11. Compared to June last year, the exchange rate of euro has fallen by about 17 percent. In February-April, the exchange rate of euro to dollar reached around 1.4,” Aliyev added.

The expert went on adding that depreciation of the exchange rate of euro will stimulate not only the export of the Eurozone, but will also improve the indicator of tourist flow to Europe.

“The level of investment in the real estate market will be in focus as well. However, unlike Azerbaijan, the unfavorable situation of the national currencies in other CIS countries, including Russia, Ukraine, Kazakhstan, Belarus, are unlikely to fully stimulate their citizens to seize the opportunity. Currencies of some of these countries have generally outperformed the euro in depreciation. Therefore, no increase is expected in tourist flow and the level of investment in real estate in these countries,” he said.

Aliyev also recommended the Azerbaijani citizens, who wish to purchase a real estate in Europe, to hurry up.

“It is expected that pumping of money by the ECB into the economy could give an impetus to the growth in property prices. Therefore, the further effect of depreciation of the exchange rate may be offset by the likely increase in property prices,” the expert concluded.

Meanwhile, the recent events in Ukraine have led to an increase of cash flow into the real estate market in Azerbaijan, particularly in Baku.

Azerbaijani citizens, who have invested in the Russian real estate market, tend to invest in their homeland. Therefore, the recent developments in Russia have forced them shift their funds to Baku.

The investors and businessmen, who work in the Russian market, prefer to invest part of their funds in the real estate market of Baku because of Russia's market instability.

Thus, after the events in Russia and Ukraine, the volume of cash flows to Azerbaijan's housing market has been on the rise.

URL: http://www.today.az/news/business/138520.html

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