Armenia’s real estate market continues to display apparent activity. However, numerical growth does not necessarily indicate qualitative development. This was stated by former head of the State Revenue Committee Davit Ananyan.
Growing regional imbalance
According to him, more than 23,000 transactions recorded between January and October 2025 may seem positive at first glance. Yet, as he notes, “as always, the reality behind the numbers is different.”
Ananyan stresses that most transactions are concentrated in Yerevan. “Nearly all of the approximately 1,770 purchase and sale transactions registered in October took place in the capital,” he says. Meanwhile, most regions remain in a phase of low activity or decline.
He estimates that Yerevan now absorbs 30–35 percent of the market. This already points to a deepening regional imbalance.
Prices, income gaps, and investment-driven demand
Ananyan notes that the average price per square meter in Yerevan approached 920,000 drams in October. In the regions, prices are several times lower.
“This gap can no longer be explained solely by market demand,” he argues. Price growth is linked to income inequality, the presence of investment buyers, and external demand.
He emphasizes that a significant share of housing demand in the capital is not driven by actual residential needs. Instead, it is shaped by credit availability and investment considerations.
Credit boom and the risk of a financial bubble
Ananyan also highlights the growing role of foreign buyers. In October alone, 482 transactions involved foreign citizens. More than 60 percent of them were carried out by individuals of Russian origin.
In his view, this creates additional external pressure on the domestic market and fuels further price growth. “Under these conditions, real estate loses its residential function and turns into a financial asset,” he says.
According to Ananyan’s data, the number of mortgage-backed transactions reached 1,225 in October. This figure has nearly doubled over the past year. It indicates that demand is driven mainly by loans rather than by income growth.
“When people buy housing through mortgages, the market becomes not a sign of development but a result of debt dependence,” he stresses.
A mirror of the economy
Summing up, Ananyan states that the real estate market has become the clearest “mirror” of Armenia’s economy. The combination of rising prices, concentrated demand, foreign activity, and a credit boom, against the backdrop of declining industry and exports, is forming a financial bubble.
He concludes that such a bubble cannot ensure the country’s long-term economic security.