Artem Pribilsky: Growth in apartment prices demonstrates that property market is recovering after AMD depreciation

The growth in apartment prices in May 2015 as compared to early 2015 demonstrates that the 

property market is recovering after the AMD depreciation of December 2014, Artem Pribilsky, Director of the Armenian Real Estate Market, has told ArmInfo.

 

"That insignificant growth does not mean serious changes. It only demonstrates the market stabilization following the drop in property prices in USD terms caused by the national currency depreciation in December 2014," says Pribilsky.   

 

He explains the reduction in the real estate transactions with the decline in Russian transfers that make up the major part of household incomes, as well as with the fall in business activity in the country and the rise in migration. "Absolute growth can be ensured due to domestic production development only," he says.      

 

According to the State Committee of the Real Estate Cadastre of Armenia, in Jan-May 2015 the average market price of housing in Armenia rose by 0.7%. The housing in apartment buildings grew by 2.7% to 86.4 thsd AMD per 1 sq m in the provinces, and by 0.1% to 274.2 thsd AMD per 1 sq m in Yerevan. Over the same period, the prices of private houses in Yerevan and in the provinces remained at 286.7 thsd AMD per 1 sq m and 89.8 thsd AMD per 1 sq m, respectively. As compared with Jan-May 2014, the apartments in Yerevan and in the provinces rose in price by 0.2%, and the prices of private houses 

remained unchanged. The number of property transactions in Armenia in May 2015 was 15,400 (down 20.3% compared to early 2015, down 14.3% compared to May 2014).

 

To recall, 45% depreciation against USD was fixed in Oct-Dec 2014 (570 AMD/1USD on Dec 17, 2014), and 40% depreciation was fixed for 2014. On May 31, 2015, the AMD/USD exchange rate was 478.54 AMD/1USD.