Monday, June 25 2012 19:53
Expert: Housing in Armenia keeps on dropping in price, but no collapse expected
ArmInfo. The descending trend in the market of residential property in Armenia will continue, but no price collapse is expected, Head of the Real Estate Exchange, Candidate of Economic Sciences Artyom Pribylsky told ArmInfo when commenting on the continued reduction of the number of transactions on alienation of residential property.
To note, according to the State Committee of the Real Estate Cadastre of Armenia, in April the transactions on alienation of residential property dropped by 5.5% (15% y-o-y decline). "The considerable decline of transactions promises no positive changes to the market, but one cannot forecast a serious prices collapse either", the expert said. He added that his opinion is also based on the fact that even over the active phase of the crisis in 2008-2009, when the United States registered an unprecedented collapse of the sector, the situation in the Armenian market was comparatively stable.
According to the expert's approximate forecasts, in 2012, like in 2011, the residential property prices in Yerevan may drop by no more than 8%. In the central part of Yerevan, particularly, in Center (Kentron) community prices may fall by 6-8% on the average, and in remote communities - by 3-5%.
The trend setters in the market of residential property are still the situation in the world markets, particularly, the debt crisis of Europe with its negative impact on Russia and consequently on the financial state of labor migrants, as well as the problem of migration from Armenia. "Migration is the most dangerous process for the market, all the other processes, such as temporary reduction in demand, are not so essential", the expert said. Pribylsky thinks that it is the migration, particularly, the intensification of the migration outflow from Armenia is a serious threat impending over the property market in particular and the country in general.
To note, according to the State Committee of Real Estate Cadastre, in April 2012 housing in the apartment buildings of Yerevan grew in price by 0.8%, and the private houses underwent almost no changes. The average price of 1 sq m of housing in the apartment buildings of Yerevan (except Nork-Marash community), is 252,000 AMD. In Center (Kentron) community 1sq m of residential property costs 405,000 AMD (more than 9% y-o-y decline, 1.3% decline for April). Private housing in Yerevan rose in price by 0.7% to 269,400 AMD (0.4% y-o-y decline).
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