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.
May 8, 2010
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