Property Market in Armenia Will Be Flat in 2013
Article: The growing strife in Syria is causing some growth in the real-estate market in Armenia, though not quite enough.
The slump in housing prices in Armenia following the global financial crisis now seems to have stabilized, in spite of growing investment from neighboring Syria. It will nevertheless remain flat thanks in part to a slow construction sector.
Armenia real estate market analysis
From Syria to Albania
Local estate agents say that a number of ethnic Albanians are moving from Syria and some will buy housing while many others will rent. This explains why there are many more rental properties available in the market than houses for outright sale.
- The Armenians who arrived from Syria are mainly affluent businessman seeking office space and housing.
- They are not in any hurry to make up their minds about permanent settlement.
- They are also having problems selling their assets in Syria and repatriating the capital.
The housing market in Armenia
The housing market is stagnating because of the lethargic construction sector and an immature mortgage market.
One real estate agent believes that the expectations of Syrian Armenians reviving the market have not been met to the expected extent.
- He also says that the market in the rest of the country is not significantly different from the market in Yerevan, the capital, other than a small revival in sales of agricultural land.
- The outlook for the rest of this year will depend on government and the way in which legislation is handled.
- This will involve making short-term sacrifices in the hope of long-term gains.
The average market price of apartments in Yerevan amounted to AMD 268,000 drams (USD $640) psm in February, up from AMD 250,100 drams (USD $600) in the same period of the previous year.
The change is due largely to the depreciation in the Armenian currency.
- The highest price recorded in February in the capital’s Kentron (downtown) administrative district was AMD 424,100 drams (USD $1,017) psm.
- The lowest price was in Nubarashen district amounting to AMD 146,200 drams (USD $350) psm.
- The average price of private houses was AMD 283,800 drams (USD $680) psm compared to AMD 269,200 drams (USD $645) psm in November last year.
- Prices of apartment buildings outside Yerevan showed an increase of 0.4% over the preceding month.
- Prices in Yerevan are almost flat, slipping back slightly from AMD 257,400 drams (USD $618) psm in 2011 to AMD 257,300 drams (USD $617) psm in 2012.
Buying property in Armenia
The average price of houses in Yerevan was AMD 274,000 drams (USD $657) psm in 2011 compared to AMD 275,000 drams (USD $660) psm in 2012.
- The process of buying is pretty straightforward and prices are now affordable.
- Apartments can be bought in both the modern buildings and the old quarters of Yerevan.
- The greatest demand is for apartments in the center of the city and in the principal Armenian resort of Lake Sevan.
- Other areas in demand are Gyumri and Vanadzor.
- The local laws do not permit foreigners to own the land in Armenia and they have to rent or merely buy the structure without buying the underlying land.
- The process takes about a week and, after your purchase is finalized in real estate cadastre, you become the owner of the property.
The bottom line
Because foreigners may not own land in the country, you should look at renting any office or residential accommodation that you may require. In any case, the local property market is expected to remain flat for the rest of 2013.