Decrease in prices for real estate unlikely in Armenia in near future

The average price for apartments in Yerevan totaled AMD 271,400 per square meter as of the first quarter of 2010.

The State Committee of Real Estate Cadastre at the Armenian government has presented the current situation in the RA real estate market, as well as forecasts for the year. The Committee’s specialists predict some activation in the Armenian real estate market but decrease in prices is unlikely in the near future.

PanARMENIAN.Net - The construction industry has had a huge share in the GDP structure in recent years, and the country’s economic growth has been secured due to its development. Thus, it is not strange that the global financial-economic crisis has affected the Armenian real estate market since August 2008. The number of transactions conducted during this period decreased by 10.6% as compared with August of 2007. The prices for real estate have started going down and 1.8% decrease was recorded in August as compared with July 2008.

The situation in the real estate market has started improving since September 2009: growth has been recorded both in the number of deals and in prices for real estate. Thus, 6.1% growth was recorded in deals made in September as compared with August 2009, while prices increased by 0.8% and 0.6% in Yerevan and regions respectively. 36,499 transactions were made in the first quarter of 2010 that is 24.3% lower as compared with the fourth quarter of 2009 and 27.9% higher as compared with the first quarter of 2009. Kotayk and Ararat regions were the most active in the market, these regions’ share in the total number of deals totaled 13.6% and 8.4% respectively. Meanwhile 32.2% of the transactions were made in Yerevan. Some positive trends are observed in the real estate market throughout Armenia. For example, 49.8% of the entire transactions were made in regions in 2001, while this figure amounted to 58.2% in 2004 and 67.8% in the first quarter of 2010.

The market price for 1 square meter in apartment buildings increased by 2.6% in Yerevan and by 1.5% in other cities of the republic in the first quarter of 2009. Meanwhile the highest prices for apartments in Yerevan are continuously recorded in Kentron (Center) district – AMD 470,600 per square meter, while the lowest prices are in Nubarashen district – AMD 143,300 per square meter. Meanwhile, the average price for apartments in Yerevan totaled 271,400 per square meter as of the first quarter of 2010. The prices per square meter in other districts of Yerevan are as follows: Arabkir – AMD 373,900, Kanaker-Zeytun – AMD 283,500, Nor Nork – AMD 234,800, Avan – AMD 235,900, Erebuni – AMD 248,000, Davitashen – AMD 270,300, Ajapnyak – AMD 239,300, Malatsia-Sebastia – AMD 236,700.

As for the regions, the highest prices for real estate were recorded in Kotayk and Armavir regions, amounting to AMD 160,000 per square meter in Abovian and AMD 156,900 - in Etchmiadzin. Relatively low prices were recorded in Tavush, Gegharkunik and Lori regions of Armenia.

2.9% growth was recorded in prices for private houses in Yerevan and Armenia’s regions, totaling 281,100 per square meter in Yerevan on an average. Again, the highest and lowest prices were recorded in Kentron and Nubarashen districts of Yerevan – AMD 484,200 and AMD 147,000 respectively.

Today, Armenia’s financial market faces the challenge of “long-term money” that can be tackled through decrease in interest rates for mortgage loans. The Armenian government has initiated two programs – National Mortgage Company UCO and Affordable Housing for Young Families – to facilitate the mortgage lending. In addition, it has provided state guarantees to construction companies to overcome this difficult period. Thus, some growth has been recorded in mortgage lending since the beginning of this year. It should be noted that the interest rates considerably decreased in 2009, making 8.5-13% against 16-20% two years ago. Population displays greater interest and, hopefully, the market will become even more active by the end of this year. Besides, construction volumes in Armenia may increase in the near future, due to economic growth recorded in Russia and Ukraine that will contribute to increase in remittances.

Victoria Araratyan / PanARMENIAN News
 Most popular in the section
Armenia’s “useless” manpower
Small and medium sized businesses weigh in on consequences of war
New markets opening for home-grown products
 At focus
Armenia dismisses Turkey’s demand to shut down nuclear plant as “inappropriate”

Armenia dismisses Turkey’s demand to shut down nuclear plant as “inappropriate” Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”.

 More articles in this section
Reduction of personnel and tax collection growth State Revenue Committee changes its policy
---