The real estate market is stable now and there is activity in the mortgage market

Despite the pessimistic forecasts caused by the Covid19 epidemic due to the April-May quarantine “lockdown”, everything in the Armenian real estate market is much more stable than expected, relatively calm and there is also the natural state of expectation.

Moreover, according to the analysis of the cadastre for May-June, there are no catastrophic declines in the number of deals and prices. Even in some parts of the market, there is growth. Thus, according to the June analysis of the Cadastre Committee, the number of purchase and sale transactions in the country has decreased compared to June last year, attention by only 1.2%, and the number of transactions in rural areas has even increased by 14.9%. The land market has become especially active, as compared to June of last year, land purchase and sale transactions have increased by 21%. The coronavirus and the epidemic did not stop even the continuous inflation of apartments ․ Compared to June of last year, the prices of apartments throughout the country not only did not decrease but also increased by 3.7%.

The above-mentioned data prove that the pessimistic forecasts about the economic crisis and collapse do not come true. This is still official, according to the cadastre, analysis ․ The assessments of real market players and analysts are much more optimistic and encouraging. Thus, in the opinion of Eduard Apriyan, business group director of “RED Group” company, “there is no collapse in the market and it can’t be for the simple reason that there are simply no preconditions for that.” According to the expert, all the pessimistic assessments have a political context and are unfounded, as “the objective reality gives completely different signals.” Let’s single out some of those signals.

1. Both before and after the epidemic, the market for new buildings and mortgages, due to the law on income tax refund, remains active, as banks have become more demanding.
2.  Unprecedented activity is observed in the land market ․ The demand for agricultural lands in the republic has significantly increased. This is due to the policy pursued by the state, which encourages to engage in agriculture, creating intensive gardens, smart barns, or greenhouses.
3. Both before the pandemic and now, new construction projects are being implemented, which are gradually moving from the communities of Yerevan Kentron, Arabkir, Davtashen suburbs, and spreading to the regions.
4. There is a certain increase in demand for land plots near the house, private houses, summer houses, and townhouses.
5. The expected decline in the rental market was observed only slightly in April-May, for objective reasons. Today it is already being regulated. Rental prices in the suburbs of Yerevan remain the same. There is some regression only in Kentron and Arabkir suburbs due to the decline of the tourism and service sector. According to experts, along with the increase in the flow of tourists, the once active rental property market of these communities will be restored.

According to the director of “Red Group”, both before and after the coronavirus, life continues to go on normally ․ Regardless of the epidemic, people will continue to get married, families will expand, and the demand for real estate will increase. “COVID can’t completely stop the normal course of life, real estate has been and remains a commodity,” says the expert. According to him, regardless of everything, my business “will continue to grow, because businessmen, being more pragmatic and optimistic people, will always find solutions in the current conditions, will think about new projects, and will consider every seemingly lost opportunity as a source of new opportunities.”. For many entrepreneurs, quarantine and forced leave became a kind of restart in terms of re-evaluating life, evaluating opportunities, looking at everything more creatively, thinking about improvement, and alternative solutions. And the direct impact of all this is observed first of all in the real estate market, as an economy, in a sense, a barometer, a primary responding link.

Eduard Apriyan also mentions that even in the conditions of maintaining the current rates of the coronavirus pandemic, the normal course in the real estate market will continue. Inflation may stop a little, but there will be no deflation, even a big one. There will be some market decline only in the secondary market, which, by the way, regardless of the coronavirus, has already begun and will continue, as the preference of a huge mass of buyers has shifted to the primary market – greater confidence in new buildings, higher demands and, of course, due to the income tax return law.

“Both the market signals and our positive mood allow concluding that at least by the end of the year such a market situation will continue,” he emphasizes and calls for optimism and new programs.