Expert: Real estate market of Armenia started demonstrating weak signs of recovery in I half-year

ArmInfo. The real estate  market of Armenia in the first half of 2017, despite the prolonged  stagnation of prices, began to show weak signs of recovery. According  to the director of the real estate agency "Bars" Marina Chatinyan, an  increase in interest in real estate is observed in all market  segments, from new buildings to land plots.

Commenting on the situation in the conversation with the ArmInfo  correspondent, the expert informed that there is no activity that was  in the pre-crisis period, and nevertheless, today there is a real  movement. One of the key moments of the moderate restoration of the  real estate market, the expert determined the seasonal factor,  accompanied by the influx of representatives of the Diaspora, who  rent accommodation for the period of rest in Armenia. However,  similar revival in the market, according to Chatinyan, is not an  innovation, but typical for the Armenian market every year in the  summer. 

Adhering to more optimistic views, M. Chatinyan does not exclude the  duration of the observed positive trends and exclusion of dependence  on seasonal factors. However, the expert could not give  medium-term/short-term forecasts concerning the movement of prices  for real estate. To this end, in her opinion, serious economic  justifications are needed, in particular, creation of new jobs,  liberalization of the tax field, etc. "The situation is certainly  better than a year ago, but I do not see any significant progress.   However, if the fact that our government is intentionally implemented  will be clever and effective, then the situation will change for the  better with time," she said.

In this context, as an influential factor, the expert noted the  construction project for Block N33 (market area on Firdusi Street not  far from Republic Square), where multi- storey underground parking  lots, new streets, public and service facilities, business centers  and hotels will appear. "When construction is in progress, it is a  push for all types of business, new buildings will appear,  investments will be made, jobs will be created and this will all  bring economic revival first of all in the capital," said M.   Chatinian. However, in her opinion, the stabilization of prices in  Armenia may be affected by a decrease in the outflow of population  due to the observed instability abroad.

Speaking about the activities of Bars agency, Ms. Chatinian noted  that for the first half of 2017, sales of real estate increased by  10% year on year. Positive dynamics, according to her, is primarily  due to increased interest in the primary real estate market, whereas  previous  year, the secondary was more active in terms of demand. In  this regard, she noted the exclusive sale of luxury apartments in a  residential complex located in one of the best parts of the city - on  the upper left slope of the Cascade. In just one month, she said,  three apartments were sold, which is a good indicator for this  period. Along with that there is some interest in agricultural plots  and commercial real estate, which to some extent, she said, is  associated with positive trends in the economy. However, Ms.   Chatinyan did not exclude the possibility of revitalizing the  mortgage market, in view of the agency's agreement with the finance  structures  to provide housing in the complex Cascade in mortgage at  an interest rate of 8.8% per annum. "According to the Yerevan  standards this is a very good indicator, the program will be launched  soon and the mortgage market should become more active," she  explained.

Returning to the official data, the head of Bars agency, noted that  State Committee of the Real Estate Cadastre of the RA leads several  buyers disorienting the calculation.  "How to average the prices for  a new building, panel buildings, "Khrushchyevka", etc.  and use these  data as a pricing factor?" , - stated the expert. Summing up the  conversation, Ms. Chatinian noted that the shift in the real estate  market for the first half of 2017, although easy, but still tangible,  as compared with the previous period affected all segments of the  market. 

Nevertheless, according to the State Committee of Real Estate  Cadastre, the average market value of housing in Armenia decreased by  1% per annum in the first half of 2017, and by 1.3% over the first  half of the year, to 183.1 thousand drams/1 sq. m.  Apartment blocks  on average for the year (first half of 2017 to the same period of  2016) fell by 0.3% - to 180.5 thousand drams/1 sq. m. (the decline  for the half-year was 0.9%).  In particular, the price of an  apartment in Yerevan was 267.2 thousand drams/1 sq.m.  (with an  annual decline of 2.8% and for the half-year - 2.9%), and in the  regions - 84.8 thousand drams/1 sq.m. (with a more significant annual  decline of 3% with a decline in the half year by 5%).

Meanwhile, prices for private houses on average for the first half of  2017 fell by 1.6% to 185.7 thousand drams/1 sq. m., with a decline  for the first half of 2007 by 1.7%. In the regions the cost of 1  sq.m. of private house decreased for the year and half a year by 1.6%  to 89.4 thousand drams.

In the capital the cost of 1 sq.m. for private house in annual terms  decreased by 1.6% to 282 thousand drams/1 sq. m., with a decline for  the first half of 2007 by 1.7%. In total, the price is 1 sq.m. in the  capital's residential real estate (multi-apartment buildings and  private houses) fell by 0.16% on an annual basis, making an average  of 279 thousand drams, and for the half-year - by 0.7%.

According to the State Statistics Committee, the highest prices for  apartments in Yerevan have traditionally been kept by the community  of Kentron (Center) - 435.5 thousand drams/1 sq. m. on average, with  an annual growth of 1.8%, with growth for the first half of 2007 by  1.7%. Then follows Arabkir, where the price of multi-apartment  buildings is fixed at 347.2 thousand drams/1 sq. m., with an annual  decline of 2.7% and for the half-year by 2.8%. These communities also  traditionally record the highest prices for private homes: Kentron -  476.2 thousand drams/1 sq.m. (annual growth of 0.02% with a decline  of 0.03% over the half year) and Arabkir - 381.6 thousand drams/1  sq.m, with a decline for the year and half-year by 0.4%.

The lowest prices for housing in the capital are invariably preserved  in Nubarashen, where the prices for apartments during the reporting  period amounted to 156.8 thousand drams/1 sq. m. (annual decline by  0.4 and for half-year - 0.2%), and the cost of private houses - 150.4  thousand drams/1 sq.m. on average (a decline for the year and half a  year by 0.3%).

In the regions, the highest prices for private homes were recorded in  the resort town of Tsakhkadzor (Kotayk region) - 302.7 thousand  drams/1 sq. m. (with a decline for the year and half-year by 0.8%).  Then follows: Abovyan (Kotayk region) - 156.6 thousand drams/1 sq. m.  (annual decline of 0.4%, and 0.5% for half year) and Vagharshapat  (Armavir region) - 151.6 thousand drams/1 sq. m. (with a decline in  the year and half a year by 1%). In the regions, the three  above-mentioned cities are also leading in terms of apartment prices:  Tsakhkadzor - 290.9 thousand drams/1 sq. m. (with a decline for the  year and half a year by 0.5%), Abovyan - 151.4 thousand drams/1 sq.  m. (with a decline for the year and half of the year by 2.4%) and  Vagharshapat - 143.2 thousand drams/1 sq. m. (with a decline for the  year and half a year by 7.1%).