By Shakeh AvoyanArmenia’s real estate prices, which have skyrocketed in recent years, rose by another 20 percent in the first half of 2005 on the back of continuing economic growth and external cash inflows, a government official said on Tuesday.
The figure registered by Armenia’s State Cadastre Committee shows a considerable slowdown in the growth of housing prices that have more than tripled since 2000. The continuing depreciation of the U.S. dollar against the Armenian dram also appears to have play a role.
“The price increase this year is much more modest compared with the previous years,” the head of the government agency’s analytical department, Arshak Khachatrian, told RFE/RL.
Khachatrian described the slowdown as a welcome development which reflects the fact that demand in houses and apartments is increasingly matched by supply. “We believe that the real estate market has entered a period of natural development that will see no drastic price changes,” he said.
Downtown Yerevan remains the country’s by far the most expensive residential area with apartment prices currently hovering between $1,000 and $1,500 per square meter, or ten times more than in the city’s most remote suburb.
The city center is undergoing a massive and controversial redevelopment, with two new avenues to be lined by expensive apartment and office buildings currently under construction. New upscale housing is also being built on just about every empty lot in the area.
A large part of the new apartments are reportedly bought by Armenians working abroad as well as foreign nationals of Armenian origin. The broader cash remittances from abroad are also thought to have been a major factor in the surge of the housing prices.
According to Khachatrian, the State Cadastre Committee registered some 55,000 real estate transactions in the first half of the year and expects more such deals in the second half. “As for the situation with prices, we don’t expect major changes,” the official said.