According to official data, the real estate market in the capital city continued to show negative trends in October. There were 717 real estate transactions carried out in Yerevan during this month, which is a decrease of 133 transactions compared to the previous month, or 15.6% decrease. While the decline is not significant, it is clearly visible in the graph.

From January to October, the number of transactions decreased by 2.7 thousand or 12.7% compared to the same period in the previous year. This is the highest decline in recent years, which is bad news for the market.

There are several possible reasons contributing to this decline. One reason is the uncertainty of the epidemic, along with internal socio-economic activities. In recent years, there has been an increase in demand for real estate, especially among average-income individuals who previously couldn’t afford to buy a house. However, this program which started in July 2020 has now ended, resulting in a gradual transition to other parts of the city.

Another factor is that potential buyers were mainly interested in purchasing apartments in new buildings that were not financed by financial institutions in previous periods. However, the subsequent economic crisis caused by the pandemic led to the end of this program.

These three negative factors directly affect the potential profitability of real estate by increasing purchase costs and prices. However, despite the decline in transactions, there has been an increase in the average price of real estate, including apartments. The Center and Arabkir administrative districts of Yerevan experienced the highest decrease in transactions, more than 48%, but they also had the highest increase in average prices.

It’s important to note that these three factors have also reduced the affordability of housing for many city residents. The increase in compulsory expenditures and taxes has made it more difficult for high-income individuals to afford elite housing, leading them to move to smaller areas or private houses.

While the real estate market in the capital city is facing challenges, the role of foreign buyers is not significant. The concerns of displaced Armenians may have influenced the market, but the majority of funds from Armenians in the Diaspora who were planning to invest in apartments have already been transferred. The market is still waiting for high-income residents to start buying real estate and potentially improve the situation.

The ruble has played a minor role in the real estate market, indicating minimal damage caused by currency dynamics. The increase in mortgage rates, especially in US dollars, is affecting the housing construction sector.

In conclusion, the real estate market in Yerevan has experienced negative trends in October, with a decrease in transactions and an increase in prices. The decline is most evident in certain districts, while the increase in mandatory expenditures is affecting the affordability of housing for many residents. The market awaits the involvement of high-income individuals and potential improvements in the financial situation.