Tuesday, June 15, 2010

Real estate prices through 2010Q1

After peaking in 2008, and jolted by the global financial crisis, real estate prices seem to have stabilized recently. Stated in USD, the slide in prices accelerated with the devaluation of the Dram in March of 2009. But stated in Drams, the decline has been more modest. More specifically, the price per sqm in Yerevan in 2010Q1 was 761 USD compared to 968 in 2008; down by 27 percent. Converted to Drams, the respective prices are 271400 vs 296300, for a reduction of 8 percent only.

Properties changing hands also follow a similar pattern but up through 2007. The number of transactions peaked in 2007, with August 2008 as a major turning point.

A recent IMF working paper attributes much of the growth in housing prices in Armenia and a number of countries in the region to factors such as GDP, remittances, and external financing. See House Price Determinants in Selected Countries of the Former Soviet Union.

Average price in USD per sq meter in Yerevan (excluding New Marash): 2003-2010Q1
Source: Calculated from Cadastre data. For greater detail see data page of http://www.aea.am/ (under Resources).

Number of transactions in Armenia: 1998-2009.
Source: Cadastre. For greater detail see data page ttp://www.aea.am/ (under Resources)