Fostering Foreign Residential Real Estate Investment in Azerbaijan: Comparative Policy Analysis

Abstract

The real estate industry in Azerbaijan is a significant contributor to the country's economy and has a direct impact on its economic indicators. However, due to the lack of attractive legal and market conditions and underdeveloped infrastructure, there has been a gradual decline in foreign direct investments in the real estate sector. As a result, investing in real estate has become a major topic of discussion. The purpose of this paper is to investigate ways to increase foreign direct investment (FDI) in Azerbaijan's real estate market. It has been found that the lack of attractive regulations, rising prices, skill shortages, and underdeveloped infrastructure are significant obstacles to its growth and investment. To identify the reasons for the low investment rate, the research is divided into three main areas: legal, market, and infrastructure areas. The study highlights key issues that cause low investment rates in each area and proposes three alternative policies to increase investment in each direction. While analyzing the world real estate market for comparative analysis the experience of Türkiye, Armenia, and Russia is used. It has come to light that Azerbaijan's real estate industry is underperforming compared to neighboring countries. The policies offered have been evaluated based on five categories: effectiveness, efficiency, equity, feasibility, and flexibility. This study provides actionable recommendations for investors, stakeholders, and policymakers looking to improve the sustainability and appeal of residential real estate investment in Azerbaijan by analyzing the lessons learned from other countries and determining how well they apply to the case of Azerbaijan