Residential real estate prices in Armenia declined in 2017

Residential real estate prices in Armenia declined in 2017
By bne IntelliNews June 4, 2018

Armenia saw a decline in residential real estate prices in 2017, despite an increase in activity on the property market, a new report published by the central bank shows. 

The market price per square metre in residential apartments declined by 3.5% y/y in Yerevan, and 5.0% in other towns in 2017. Within the capital, prices fell in almost all districts except the city centre, where the average prices for apartments remained merely unchanged, said the central bank’s 2017 financial stability report. This followed several years of virtually flat prices. 

 

 

On the other hand, the number of real estate sale and purchase transactions (including for apartments) was up 15.1% y/y in 2017. The rate was faster for residential apartments; 23.7% in Yerevan and 12.3% in other parts of the country. 

 

 

 

“[M]ortgage lending has its positive impact on the demand for real estate. In 2017, as compared to 2016, both the volume and number of loans for real estate purchase with banks and other credit organisations grew by 16.3% and 11.9%, respectively,” according to the report. 

The central bank also noted an increase in the volumes of real estate held as collateral with banks, though banks kept the loan-to-value (LTV) ratio for mortgage loans in the range of 60%-80% to curb credit risk from possible fluctuations in real estate prices. 

An improvement in the quality of the real estate loan portfolio was observed, with a 2.5 pp decline in non-performing real estate loans, which amounted 3.2% of total real estate purchase loans.

Data

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