Home Sales in Yerevan Surge After Months Of Decline

homesYEREVAN (RFE/RL)–The number of officially registered real estate transactions in Armenia jumped by 36 percent in June after months of rapid decline reflecting the ongoing economic crisis, the government said on Friday.

A top aide to Prime Minister Tigran Sargsyan overseeing the government’s anti-crisis measures said the increase reported by the State Cadastre Committee bodes well for the country’s emergence from its worst economic recession since the early 1990s.

“This is a significant indicator which shows that the [real estate] market is slowly recovering and that we have passed the stage of [price] fluctuations,” the official, David Harutiunian, said. “This testifies to increased activity in the market.” He did not say whether Armenian housing prices rose just as significantly.

The local construction industry has been hit hardest by the recession, shrinking by as much as 55 percent year on year in the first seven months of this year. That translated into an overall GDP drop of 18.5 percent. Accordingly, the sector has been a key beneficiary of large-scale anti-crisis loans attracted by the Armenian authorities from foreign lenders.

That apartment and house sales in the country have been on the rise of late was confirmed by some private developers. “Apartments do sell now,” said Armen Mkoyan, director general of the construction company Elite Group. “It’s just that buyers are worried that buildings won’t be completed and don’t make acquisitions for that reason. That is why there is now a strong delayed demand [for homes] in the republic.”

“The situation is stabilizing now and sales are going up,” Mkoyan told RFE/RL. “We have seen a positive dynamics in the last two months.”

Elite Group is one of six Armenian companies that have received credit guarantees from the government this year. The government set aside 20 billion drams ($53 million) for that purpose in March in an effort to shore up the construction industry.

According to Harutiunian, at least two dozen construction firms have applied for such guarantees since then. “The criteria used in the selection process are very strict,” he said, explaining why few of those applications were approved by a special government commission.

Harutiunian also attributed increased housing sales to the establishment in June of a state-owned mortgage fund which is supposed to make housing loans cheaper and more accessible for Armenians. The National Mortgage Company has an authorized capital of 22 billion drams and is expected to receive 20 million euros ($28 million) in additional funding from the German government soon.

In Harutiunian’s words, the total amount of mortgage loans disbursed in Armenia this year has already surpassed the 2008 level of 88 billion drams.


Discussion Policy

Comments are welcomed and encouraged. Though you are fully responsible for the content you post, comments that include profanity, personal attacks or other inappropriate material will not be permitted. Asbarez reserves the right to block users who violate any of our posting standards and policies.