09:51,
YEREVAN, JANUARY 18, ARMENPRESS. 492 billion 933,5 million (over $1,2 billion) in construction was carried out in Armenia in January-November 2023, a significantly high figure said to be pushed by various factors.
Narek Karapetyan, a researcher at Amberd Research Center, told Armenpress that the construction boom is associated with several factors, such as the revenue tax-mortgage interest rate program (mortgage tax relief) and its gradual cancellation in Yerevan, the increase in demand in the real estate market and growth in revenue.
“This is a high figure. And it has been high all the time in the past few years,” Karapetyan said.
“The main moving force is the [mortgage tax relief] program and its gradual cancellation in Yerevan, this has contributed to faster construction,” he added.
Speaking about the growing demand in the real estate market, the expert said the increase is mostly due to foreign travelers, but not necessarily because they are buying homes, but actually because they have become the main actors in the rentals market, which subsequently increased the prices and made homeowners in Armenia buy new apartments and rent them out. This, in turn, leads to increase in demand, i.e., construction of new housing projects.
23% of the total construction of 2023 was carried out from the state budget. This mostly encompasses road construction, according to Karapetyan.
Most of the construction was carried out by private companies (256,6 billion drams), growing 22,5% compared to 2022’s same period. Foreign investors carried out over 3,9 billion drams in construction, which is a 63,9% YoY decrease.
Commercial banks issued a total of over 483,6 billion drams in loans to the construction sector in 2023 November, which is 143 billion more compared to 2022 November.
Although the construction volume of the past few years is still behind the figures of the construction boom of the 2000s, the actual number of buildings that are being built now contain characteristics of a boom. The present-day figures are behind those of 2007-2008, but now the model has changed, and there’s a boom in this new model which encompasses a broader circle of people.
According to Karapetyan, in the 2000s people were mostly buying real estate in downtown Yerevan, whereas now they prefer the suburbs. Apartment purchases are now attributed to the middle class, he said, adding that in the 2000s most of the buyers were either foreigners or people with significantly higher income.