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Armenian Housing Market Sluggish In 2012


Armenia - Newly constructed residential buildings in the center of Yerevan, 28Aug2011.

Armenia - Newly constructed residential buildings in the center of Yerevan, 28Aug2011.

Housing prices in Armenia rose only slightly last year despite faster economic growth and increased remittance inflows from abroad, a senior government official said on Friday.

Yervand Zakharian, head of the State Committee of the Real Estate Cadastre, cited government data that shows property prices in Yerevan remaining virtually unchanged in the course of 2012.

This contrasted with a 3.5 percent rise in apartment prices in other parts of the country. The cost of private houses there was up by less than 1 percent.

According to Zakharian, apartments in Armenian regions cost an average of 82,100 drams ($203) per square meter, compared with 257,300 ($635) in Yerevan.

The official also reported a 9 percent drop in the overall number of property sales and purchases registered by his agency in 2012. By contrast, he said, there were more housing leases because of the influx of thousands of ethnic Armenian refugees from Syria.

Armenian housing prices surged during several consecutive years of double-digit economic growth that ended in late 2008. The global financial crisis caused them to collapse in 2009. The downward trend continued in 2010 and 2011.

Armenia’s construction industry has also shrunk dramatically since the 2009 recession. According to the National Statistical Service (NSS), its contraction nearly stopped in 2012, one of the reasons why economic growth in the country was on course to accelerate to 7 percent.

The housing market was largely stagnant also despite a considerable rise in remittances from Armenians working abroad, which have long been a major source of housing spending in the country. The Central Bank of Armenia puts the total amount of incoming cash transfers processed by commercial banks in January-November 2012 at just over $2 billion, a year-on-year increase of almost 15 percent.

Zakharian predicted that real estate prices will grow faster in the years ahead. “There will certainly be some, if not major, growth in real estate prices starting from 2013,” he told journalists.
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