Armenia currently faces a shortage of properties available for sale. Combined with rising demand, this is pushing apartment prices higher. Large sums transferred from Russia to Armenia, often used to purchase property, are another factor behind the increase. This was stated by Arayik Gojabashyan, founder of ARGO Realty.
According to him, one reason for declining construction volumes is the withdrawal of the income tax refund programme from Yerevan. As a result, many developers see sales risks and have become more cautious about launching new projects.
Gojabashyan identified another factor: a government decision allowing developers to use up to 50% of funds frozen in banks during construction. The remainder becomes available after the building is commissioned. He said this also creates risks for developers, leading them to build less.
“Demand is high, construction is limited, and prices rise because of the shortage,” he said.
Money arriving from Russia increases demand
According to Gojabashyan, large sums transferred from Russia to Armenia are another important reason for rising property prices.
In his assessment, Armenians living in Russia, as well as Russian citizens, are concerned about potentially losing their money amid the war. They therefore move their funds to Armenia. Difficulties with transfers mean that some bring the money in cash.
He said these funds are now entering Armenia as substantial investments. A significant share is directed towards the property market.
“They did not buy this much before. They bought property, but not in these volumes. This increases demand, which in turn pushes prices higher,” Gojabashyan said.
He forecasts that apartment prices will continue to rise unless new economic or political crises occur.
Gojabashyan also noted that rising property prices affect other sectors of the economy. He described construction as one of the economy’s driving forces, supporting the development of around 22–23 related sectors.
Timing matters when buying an apartment
According to Gojabashyan, anyone deciding to buy an apartment should consider market conditions and make their decision as quickly as possible.
He advised paying attention to buildings under construction. Apartment prices are generally lower during the initial construction stage. Prices rise as construction progresses. In some cases, apartments sell quickly, leaving buyers with fewer options.
Unsafe older buildings are a national security issue
Discussing Armenia’s housing stock, Gojabashyan said the condition of Soviet-era buildings poses serious problems. Many buildings have suffered natural deterioration. In some cases, their condition has also worsened because of excavation in basements and additional floors built on rooftops.
He stressed that the problem of unsafe older buildings must be addressed as quickly as possible.
“I always say this is a national security issue. It must be resolved as soon as possible. These buildings must be demolished, and the people living in them must receive better-quality apartments,” Gojabashyan said.
According to him, even buildings that have not been officially classified as unsafe may have serious problems. He cited Yerevan’s Ajapnyak administrative district, saying it contains many unsafe buildings and requires comprehensive inspections.
The state and businesses should work together
Gojabashyan believes cooperation between the state, the government and the private sector is necessary to address the problem of unsafe buildings.
He proposed allowing developers to undertake projects involving the demolition of unsafe buildings and the construction of new residential buildings in their place. In return, they should commit to providing existing residents with better-quality apartments and, where possible, larger ones.
At the same time, he said conditions must be created that encourage developers to participate in these projects.
“A businessman cannot always do something as a favour, whether for the state or its citizens. He also needs to earn money,” he said.
According to Gojabashyan, the state and the private sector should negotiate and determine how to organise this process. Both the Republic of Armenia and its citizens should benefit.
He also proposed discussing whether the income tax refund programme could apply to projects replacing unsafe buildings. In his view, when a developer demolishes an unsafe building and constructs a new one, the programme or other tax incentives could encourage such projects.
Gojabashyan stressed the need to provide residents of unsafe buildings with new apartments as quickly as possible, while also supporting the development of construction.
👉 Economy