Recently, the National Statistics Service of Armenia came out with the basic macroeconomic standards in Armenia depicting the social/economic status during the first trimester of this year. The most interesting of all is the entire surface area of the constructed, residential buildings and it has grown by 58.4% during the given time.
In fact, that number has grown by 80% in June alone. Has this affected real estate prices in any way? After all, based on economics, when supply goes up, prices go down.
I talked to one of the real estate agents of Armenia about this. There was an interesting tendency in the real estate market last fall. The sale of old and new buildings could be divided in two. The prices for old buildings were increasing, while the new building prices were going down. In any case, the first were cheaper than the second. According to the broker, prices for elite residential buildings “stopped” going down. As always, it’s easy to get a 1 square meter apartment in a new building for 1000-1100 dollars in the heart of Yerevan. In contrast to this, the prices for apartments in old buildings are going up. The broker assures that the price for a 1 square-meter apartment in an old building costs more than the one in a new building. The reason for that is the following:
“The person buying an apartment in a new building loses surface because the halls count as space too,” says the broker.
Usually, residents also construct parks and garages in front of the elite buildings; there is security and other services. The residents pay for the services and it’s rather expensive. It’s generally 100 dollars a month, but it’s a little cheaper in new buildings.
So, there really isn’t a huge difference between apartment prices in old and new buildings and according to the broker-there is a balance. There are even newly constructed buildings with incomplete apartments that have already been sold. The future residents of the elite buildings usually renovate their homes and show the workers how to do the job.
Who usually buys apartments in Yerevan? According to the real estate agent, recently there are a lot of Iranians buying homes in Yerevan because they worry over the future of Iran and leave for Armenia. In fact, they prefer the Arabkir community. There are also Syrians and Lebanese living in Yerevan.
“Armenians have the habit of buying a home, remodeling it and then renting it to get more profit,” says the broker.
He says that most of his colleagues agree that real estate prices in Armenia are immoderately high and that the difference in prices of apartments in the heart of the city are aimed towards moving the people living in the center to the outskirts and “populate the center with the higher level of society”. He refused to make any comment about the future of real estate prices in Armenia. However, as an Armenian citizen, he worries that if things go at this rate, then having your own home will only be a dream for citizens of Armenia.