Friday, May 10 2024 20:29
Alina Hovhannisyan

CBA Governor: Overheating of prices in Armenian real estate market  may have ranged from 20-30%

CBA Governor: Overheating of prices in Armenian real estate market  may have ranged from 20-30%

ArmInfo.The overheating of prices in the Armenian real estate market may have ranged from  20-30%. This was stated by Governor of the Central Bank of Armenia Martin Galstyan on May 10, during an event held in Yerevan over the "Perspectives of Regional Economic Development" IMF report, referring  in this regard to the Central Bank's Report on Financial Stability.

He said that the influx of new migrants to Armenia (since the  beginning of the Russian-Ukrainian conflict, ed. note) created some  frustration among local players. "The additional demand in the market  was caused by ordinary citizens who did not need additional  apartments, but considered it expedient to buy and rent them to  foreign citizens who moved to Armenia. These complex interactions  have led to us witnessing our real estate and mortgage markets  overheating," Galstyan explained.

In this regard, the Central Bank decided to tighten LTV  (loan-to-value) more, and also adopted a law that prohibits  individuals from obtaining mortgages in foreign currency, which  helped eliminate exchange rate risk.

"We also increased the countercyclical capital buffer by 150 basis  points, which means we need to build buffers while times are good.  Because it is obvious that risks are accumulating, we will inevitably  face them in the future. In this sense, it is very rational both on  the part of the banking sector and from the point of view of  regulatory policy to increase the ceiling of buffers in order to  protect against possible negative shocks that we may see in the  future," Galstyan said.

According to the Financial Rating of Banks and Credit Companies in  Armenia as of September 30, 2023, prepared by ArmInfo , mortgage  lending in Armenia accelerated the y-o-y growth rate  from 20.5% to  24.8%, ensuring a volume of 1.3 trillion drams ($3.2  billion). This  is the total volume of mortgage lending from all 18  banks and three  mortgage companies - the National Mortgage Company, Affordable  Housing for Young Families and the First Mortgage Company, but the  dynamics of the previous year also considers the Artsakh Fidesz  mortgage company, the activities  of which were suspended after the  September events of 2023.

POST A COMMENT
Input digits     


News
Armenia at the forefront of science and technology - Richard VermaArmenia at the forefront of science and technology - Richard Verma
EU to send EUR 100 thousand in humanitarian aid to Armenia to support villages most affected by floodEU to send EUR 100 thousand in humanitarian aid to Armenia to support villages most affected by flood
Sarah Morgenthau: US is ready to expand economic relations with  ArmeniaSarah Morgenthau: US is ready to expand economic relations with  Armenia
Armenia, Ukraine discuss possibilities of expanding trade and  economic cooperationArmenia, Ukraine discuss possibilities of expanding trade and  economic cooperation
EDB provides AMD 100 million to help overcome flood consequences in  ArmeniaEDB provides AMD 100 million to help overcome flood consequences in  Armenia
2024-2030 employment strategy presented in Armenia 2024-2030 employment strategy presented in Armenia 
Ardshinbank CJSC joins the Partnership for Carbon Accounting Financials.Ardshinbank CJSC joins the Partnership for Carbon Accounting Financials.
SCR launches Yerevan-Batumi-Yerevan trainSCR launches Yerevan-Batumi-Yerevan train
Large-scale road construction work suggests creation of new road  networkLarge-scale road construction work suggests creation of new road  network
EBRD appoints new Managing Director for Turkiye and the CaucasusEBRD appoints new Managing Director for Turkiye and the Caucasus
From January 1, 2026, medical insurance will become mandatory for   tourists  arriving in GeorgiaFrom January 1, 2026, medical insurance will become mandatory for   tourists  arriving in Georgia
IDBank issues the 3rd tranche of dollar bonds of 2024IDBank issues the 3rd tranche of dollar bonds of 2024
So that old age can be a joy! Present and future of funded pension  reform in ArmeniaSo that old age can be a joy! Present and future of funded pension  reform in Armenia
Premier: Armenia increases its level of sovereignty and independence  every dayPremier: Armenia increases its level of sovereignty and independence  every day
EventHub.am is the official ticketing agent for the concert of the world renowned Black Eyed Peas in TbilisiEventHub.am is the official ticketing agent for the concert of the world renowned Black Eyed Peas in Tbilisi
National Geographic recommends visiting Armenia as an attractive  tourist destinationNational Geographic recommends visiting Armenia as an attractive  tourist destination
Pashinyan: program for providing housing to forcibly displaced  persons from Nagorno-Karabakh is entering practical stage of  implementationPashinyan: program for providing housing to forcibly displaced  persons from Nagorno-Karabakh is entering practical stage of  implementation
Projects implemented jointly with Rosatom State Corporation discussed  in ArmeniaProjects implemented jointly with Rosatom State Corporation discussed  in Armenia
Assessing long-term impact of new US sanctions against Russia will  take time - Central Bank GovernorAssessing long-term impact of new US sanctions against Russia will  take time - Central Bank Governor
Martin Galstyan: Azerbaijan is not among top 50 remittance  destinationsMartin Galstyan: Azerbaijan is not among top 50 remittance  destinations
Armenian Parliament approves report on  Execution of State Budget for  2023Armenian Parliament approves report on  Execution of State Budget for  2023
Fly Arna staff demand salariesFly Arna staff demand salaries
Pashinyan: Work has begun on developing program to address priority  issues for restoring disaster zone Pashinyan: Work has begun on developing program to address priority  issues for restoring disaster zone 
Instant money transfers from Russia to Armenia with the “ФОРА-БАНК” appInstant money transfers from Russia to Armenia with the “ФОРА-БАНК” app
Since 2017, National Foundation for Servicemen Insurance has paid  monetary compensation to families of 5,345 dead, missing servicemenSince 2017, National Foundation for Servicemen Insurance has paid  monetary compensation to families of 5,345 dead, missing servicemen
Armenia`s CB revises GDP growth forecast for 2024 upward Armenia`s CB revises GDP growth forecast for 2024 upward 
Economic entities must not get accustomed to Economic entities must not get accustomed to "cottonwood existence" -  minister
State budget both financial and political document - minister State budget both financial and political document - minister 
Premier was presented with draft strategic employment programPremier was presented with draft strategic employment program
WB does not change previous improved forecast for Armenia`s GDP  growth of 5.5% in 2024 and 4.9% in 2025 WB does not change previous improved forecast for Armenia`s GDP  growth of 5.5% in 2024 and 4.9% in 2025 
Martin Galstyan: Under favorable conditions, loan interest rates may  dropMartin Galstyan: Under favorable conditions, loan interest rates may  drop
CBA: GDP above-potential growth and its non-widespread nature poses  uncertainties regarding relative position of aggregate demand versus  aggregate supplyCBA: GDP above-potential growth and its non-widespread nature poses  uncertainties regarding relative position of aggregate demand versus  aggregate supply
Central Bank Governor: Inflation in Armenia to approach 2.2%-2.5% by  end of yearCentral Bank Governor: Inflation in Armenia to approach 2.2%-2.5% by  end of year
Armenia`s Central Bank expects additional incentives after Government  increases spending on eliminating consequences of disaster Armenia`s Central Bank expects additional incentives after Government  increases spending on eliminating consequences of disaster 
idcoin: New tool in IDBank’s loyalty systemidcoin: New tool in IDBank’s loyalty system
Armenia`s Central Bank continues reducing refinancing rate Armenia`s Central Bank continues reducing refinancing rate 
Income tax on mortgage loans to be abolished in 2029 Income tax on mortgage loans to be abolished in 2029 
About 173 Million Drams and More Than 30 Beneficiary Funds. About 173 Million Drams and More Than 30 Beneficiary Funds. "The Power of One Dram" is 4 Years Old
Armenia to participate in Food Africa-2024 exhibition Armenia to participate in Food Africa-2024 exhibition
EasyPay Supports Launch of “Financial Literacy” Program by Armenian Code Academy and Technological Education Foundation EasyPay Supports Launch of “Financial Literacy” Program by Armenian Code Academy and Technological Education Foundation 
 Team promotes business education: CaseKey Academy opened Team promotes business education: CaseKey Academy opened
Armenian-Indian business forum held in YerevanArmenian-Indian business forum held in Yerevan
Armenia elected UN Economic and Social Council Member for 2025-2027Armenia elected UN Economic and Social Council Member for 2025-2027
Central Bank identifies two main risks threatening Armenia`s  financial stabilityCentral Bank identifies two main risks threatening Armenia`s  financial stability
Armswissbank issues 3 bonds from the 10th of juneArmswissbank issues 3 bonds from the 10th of june
The Power of One Dram to The Road of Life: July`s Beneficiary is Strong MindThe Power of One Dram to The Road of Life: July`s Beneficiary is Strong Mind
Recent floods in Armenia confirm need to ensure food security -  statementRecent floods in Armenia confirm need to ensure food security -  statement
AraratBank places dollar bondsAraratBank places dollar bonds
Russia making efforts to resume launch of Mir cards in Armenia,  Kyrgyzstan Russia making efforts to resume launch of Mir cards in Armenia,  Kyrgyzstan 
Deputy Minister of Finance: Export of goods of Armenian origin  decreased by 14.3% in Q1 2024Deputy Minister of Finance: Export of goods of Armenian origin  decreased by 14.3% in Q1 2024
OVIO modernizes its sales and service centers in Kapan, Kajaran and  GyumriOVIO modernizes its sales and service centers in Kapan, Kajaran and  Gyumri
EU to allocate EUR11 million for next 5 years to implement R2D Syunik  projectEU to allocate EUR11 million for next 5 years to implement R2D Syunik  project
New sports complex to be constructed in KapanNew sports complex to be constructed in Kapan
Higher-rate economic activity growth in Armenia Higher-rate economic activity growth in Armenia 
 Armenia`s regional administration to receive AMD 2.5bln for  subvention programmes  Armenia`s regional administration to receive AMD 2.5bln for  subvention programmes 
Turnover tax forming unhealthy economic environment should be  abolished - premier Turnover tax forming unhealthy economic environment should be  abolished - premier 
Armenia is especially loved by tourists from Russia, Georgia, Iran,  the USA, Germany, France, Ukraine, China and BelarusArmenia is especially loved by tourists from Russia, Georgia, Iran,  the USA, Germany, France, Ukraine, China and Belarus
CBA CBA "accuses" bank clients of "illogical behavior"
Sanosyan: some problems arose during implementation of first landfill  construction projectSanosyan: some problems arose during implementation of first landfill  construction project
Russian Digital Attache in Armenia: Russia`s experience in building  underwater fiber-optic link may be relevant, including for ArmeniaRussian Digital Attache in Armenia: Russia`s experience in building  underwater fiber-optic link may be relevant, including for Armenia
Read more
Exchange rates
18.06.2024
RUB4.370.00
USD388.73-0.05
EUR416.600.18
GBP493.260.71
CAD282.77-0.21
JPY24.59-0.07
CNY53.57-0.01
CHF437.761.91