The number of deals in the real estate market has fallen, the prices of apartments are falling down, it is expected that the prices will continue falling, currently the market is in stabile hard situation. These are the answers of real estate brokers concerning the current situation in the real estate market.
“Buyers and sellers are still waiting,” says Tigran Baghyan, the head of the EsCo Real estate Company’s department of real estate transactions. “Generally the prices have fallen approximately by 2,7-3% compared to December 2008. However citizens who want to sell their apartments urgently have to make the prices down. For example, it is easy to sell apartments in the center if the prices are reduced by 15%. The prices of half-built houses not subject to easy liquidation in the suburbs (the demand for which is lower) have fallen down by 15-17%,” said T. Baghyan. The head of the evaluation department of M&M real estate agency Ruben Ghevondyan says that the prices of apartments have fallen by 20-30%. “For example, if people offered 1cm of their apartments for 1000 dollar in December, now they offer it for 700-800 dollar. Even we have heard that someone sold one-room apartment in South-Eastern district of Yerevan for 20k dollar,” said Mr. Ghevondyan.
We wander how long the situation may continue. “I think that this is a result of the economic crisis, thus the further changes are connected with the external factors,” said the director of Realty real estate company Torgom Hovhannisyan. “I think that after spring the situation will change from being stabile to the medium stability. By saying stabile we mean that there are no moods of panic. As the experience of the past shows the situation is usually passive in summer and it is not a period of purchasing real estate because people are busy with other issues more. This year is not going to be an exception either. We are expecting growth of the deals capacity or at least delay in the process of price fall starting from September. On the other hand, economists say that there is a danger that the money capacity in the market may grow rapidly in the fall (due to emission) and I think the prices of apartments may also grow as a result of this too,” said the representative of EsCo company.
A number of representatives from other companies say that they can’t say anything because the situation is unpredictable. Currently the prices are rather different, i.e. the prices of the same apartments offered by different people are very different. “There are several qualities of apartments in the center district such as projects made during the period of Stalin, newly built houses, etc. Generally the price per square meter in the center is about 1500-2000 dollar. The price per square meter of normal apartments in secondary districts of the city is about 800 dollar. However the prices offered by citizens in Davitashen, Bangaldesh and a number of other communities are very different from each other,” said Mr. Baghyan. Private brokers say more specific details and information. For example, the price per square meter of one-room apartment in the third district of Yerevan is about 800-1100 USD. In this district one can buy one-room apartment (31 square meters) for about 29,500 dollar (950 dollar per square meter). In Zeytun community one can buy an apartment with 40 square meters for 8.75 million dram (720 dollar per meter). By the way, people may bargain and make the prices down. The prices in Arabkir community are comparatively higher (1300-1500 dollar per meter). One square meter near the Komitas street can be bought for 1100-1600 dollar. The cheapest apartments are in Avan community. The prices per cubic meter in Avan community are around 650-800 dollar. The prices of apartments near Baghramyan street are around 1200-1500 dollar. However, the prices of the apartments, which people want to sell urgently, are significantly lower.
In a word, as it was expected, the prices of real estate are falling down in Armenia. It is worth mentioning that according to the information of the Armenian state cadastre, during the last quarter of 2008 only the prices of apartments in Yerevan fell down and according to them the prices of Yerevan apartments fell down by 1.9% (the prices of private houses in Yerevan and regions grew). At the same time, this reduction was so small that it was not announced officially. Now, in fact, this reduction is quite real and seen, thus it is not excluded that during the coming months in parallel with the reduction of deals the prices of real estate will fall down too.