Real estate prices...
As summer visitors from the Diaspora hunt for real estate in Yerevan, it is interesting to hear some people complain that prices are too high, and others thinking it is quite cheap. Of course, compared to 5 years ago the prices have gone sky high - though they have been relatively stable the past 2 years. 5 years ago though prices were depressed after a massive ongoing emigration and depressed economy. Gone are those days, thank goodness. So now, prices in the desirable center are about $2,000 a square meter (or $200 a square foot - though this depends on if the place is ready to move in/remodeled or not). At these prices, an average sized flat in the center with two bedrooms (100 square meters) will go for $200,000 US dollars. Compared to prices in Glendale of course, this is still dirt cheap, and of course, the center is the most desirable area... step outside of the center and prices plummet to half or less, depending on the area, and Yerevan does not have "unsafe" neighborhoods, so it's more a matter of proximity and aesthetics. Those who complain about the prices who haven't even considered buying outside the center haven't got a whole lot of room to complain.
The reason I'm writing this is because I was reading a NYT article which mentioned some prices for European capitals. Now Armenia is clearly not economically equal with these places, but considering in a desirable neighborhood in Athens that same 100 square meter apartment (1,000 square feet) would cost you $675,500 and on the left bank in Paris you'd pay about $1.3 million, and it puts prices in Yerevan in a perspective that lets you make some sense of them. Since the prices in Europe are first quoted in Euros, something that is happening more and more often in Yerevan as well, you can also see that part of the price drop is directly related to the crash of the US dollar.
The Super Center
I'd also like to explain another reason for the prices in the center of Yerevan. Unlike a town like Los Angeles, or Tbilisi for that matter, the center of Yerevan is extremely concentrated. It is completely walkable, has most of the places where you'd tend to go for entertainment, dining, culture, etc, etc. So when you're walking around in the center, you not only don't need a car, you don't even need public transportation. It's quite nice. This makes the center much more highly desirable and thus expensive than in other cities, without even taking into account the other huge factor in price increases. You :-) Yes, there are millions of Diasporans and for every 1% of them who buy an apartment here we are talking maybe 50,000 units sold. I have no idea if we've hit 1% or not, we may gone twice that even (since the Russian and Iranian Diaspora communities are big buyers here - much bigger than America for example). If most of those units are in the center, you can see why prices shot up as they did.
The inventory of places for sale appears to have increased, to which the construction boom appears to be contributing. Prices are quite stable as I said for the past couple of years, and build able lots in the center are almost gone now - though conversely a large number of apartments will hit the market over the next 2 years. We don't know what the future will bring, but I think that prices make sense, and the economy is improving, and so I don't think anyone will regret buying an apartment at these prices.
The reason I'm writing this is because I was reading a NYT article which mentioned some prices for European capitals. Now Armenia is clearly not economically equal with these places, but considering in a desirable neighborhood in Athens that same 100 square meter apartment (1,000 square feet) would cost you $675,500 and on the left bank in Paris you'd pay about $1.3 million, and it puts prices in Yerevan in a perspective that lets you make some sense of them. Since the prices in Europe are first quoted in Euros, something that is happening more and more often in Yerevan as well, you can also see that part of the price drop is directly related to the crash of the US dollar.
The Super Center
I'd also like to explain another reason for the prices in the center of Yerevan. Unlike a town like Los Angeles, or Tbilisi for that matter, the center of Yerevan is extremely concentrated. It is completely walkable, has most of the places where you'd tend to go for entertainment, dining, culture, etc, etc. So when you're walking around in the center, you not only don't need a car, you don't even need public transportation. It's quite nice. This makes the center much more highly desirable and thus expensive than in other cities, without even taking into account the other huge factor in price increases. You :-) Yes, there are millions of Diasporans and for every 1% of them who buy an apartment here we are talking maybe 50,000 units sold. I have no idea if we've hit 1% or not, we may gone twice that even (since the Russian and Iranian Diaspora communities are big buyers here - much bigger than America for example). If most of those units are in the center, you can see why prices shot up as they did.
The inventory of places for sale appears to have increased, to which the construction boom appears to be contributing. Prices are quite stable as I said for the past couple of years, and build able lots in the center are almost gone now - though conversely a large number of apartments will hit the market over the next 2 years. We don't know what the future will bring, but I think that prices make sense, and the economy is improving, and so I don't think anyone will regret buying an apartment at these prices.
posted by Raffi K. at 8:28 AM
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