Buying, Renting, Selling: The deals are easy but not cheap in Armenia

Today there are fewer one-way tickets to the States, and fewer still apartments for $5,000. In fact, that amount would be good for no more than a 10-square meter room.

The Armenian real estate market has been undergoing a rapid development and according to specialists the market has all tendencies of further development and prices growth.

The prices for apartments in Yerevan's downtown center are the same as in some European countries, reaching $70,000 for a one room apartment, and while for some such tendencies seems to be odd, and the Armenian real estate specialists find it normal.

The Armenian State Cadastre Committee released its annual 2005 analysis on the real estate market this week, which says that the country's political as well as social-economic stability, constructing and investment projects are the key factors of the market development. The report also says that the advanced legislation in that field and improved quality of real estate agencies and realtors also contributes to the upsurge of the real estate market.

In 2000 in Armenia 33,233 property deals were recorded. The number increased to 71,981 in 2003, and increased another 70 percent to reach 122,545 in 2005.

According to State Cadastre the average price for one square meter of the multistoried building in Yerevan has increased by 24 percent from 2004 to 2005, while the number of deals in Yerevan decreased by 3 percent. According to official data the highest price for one square meter in 2005 was registered in the city's center at $968. (However in many newly constructed elite buildings the price for one square meter starts at $1000-1,200.)

Harutyun Martirosyan has been observing the real estate market for 14 years. He is the director of the M&M real estate agency, one of the first agencies in Yerevan established in 1992 after the law on privatization. Martirosyan says that the first sensitive increase of prices in the Armenian market was registered in 1995, when a large number of men who left for Russia came back with money and made their investments in property. Now ex-migrants are not the major group of buyers.

"The number of deals with Diaspora Armenians or foreign citizens has been increasing with each year," Martirosyan says. "Of course the demands and preferences of the new group of buyers shape some tendencies in the market.

"The biggest flow of foreign buyers is from Russia, Iran, Syria, Georgia as well as from European countries. They are mostly businessman, or just Armenians who find life in Armenia more secure than in countries they are from."

According to Vruyr Penesyan, the director of real estate agency "VVP" prices in 2006 will continue to grow at least in the newly-constructed buildings, the number of which reaches 100 in the center of the city. Such buildings are usually provided with Internet lines, general TV antenna, modern ventilation and heating system, natural gas. And most come with mortgages - a relatively new concept.

Penesyan's agency mostly deals with luxury apartments, which he says are in high demand.

"In my opinion this year more new building will be constructed, but the prices will be increasing only for those buildings which offer more convenience, more comfort and security. In other words who will invest more will get more. For the recent few years the ‘average' buyer has changed in Armenia. Now the buyers have not only money to invest but taste and a clear idea what exactly they want."

Both Martirosyan and Penesyan say that the more advanced loan system will positively affect the market by giving more chances to local people, mostly young middle-class families to make investments in real estate.