– What is the plight of real estate in Armenia?
– During the last 6 months the on-hold tendency has remained. The buyers are still waiting that hey may purchase real estate at a cheaper price. And the sellers are not rushing to lower the price. Of course, there are also un-delayed transactions. For example, when people are getting married and they have certain amount of money saved they don’t wait till prices go down. To cut it short, the number of transactions has reduced but the prices didn’t get cheaper. The reduction of transactions also depends on the passiveness of banking system as the banks are offering less mortgage taxes. People were prepared fro 2-3 years to purchase apartments through bank loans and now they cannot do it. The conditions of mortgage credit have been restricted. For example, they demand 50% deposit instead of the previous 30 or 20%, interest rates are increased by 2-3%. Previously the rates were 14-16%, now they are 16-19%.
– Do you know cases when the consumers, who bough apartments by mortgage credit, weren’t able to pay back and the bank sold their property?
– There are examples like that in the prime market especially by those, who are involved in business projects in Russia. Due to the crisis these projects failed and people had to refuse their apartments. In the secondary market as I know there are no issues like that so far.
– What is the situation like in the prime market in terms of prices?
– The newly built apartments don’t lose their price if not gain even more. As of semi-built apartments prices are comparably cheaper because the constructor needs money to complete the construction. It means that even if the prices go down the process is done at the expense of something. These issues are connected with the use of less quality materials (due to the crisis) or terms of construction submission, etc.
– What percentage of transactions of Armenia is complied by your company?
– Direct transactions make a major percentage of real estate market. It means that so far we don’t have the culture to buy and sell house through agencies. Besides that in Armenia 20-30 real estate agents from different agencies may be interested in the same apartment, which is nonsense in developed countries.
– Do you find it possible that real estate prices may drastically fall in Armenia?
– No I don’t think the prices will go down. But this kind of situation will remain for another year, I guess.