REAL ESTATE MARKET OF REPUBLIC OF ARMENIA IN 2006 - Annual analysis

REAL ESTATE MARKET OF REPUBLIC OF ARMENIA IN 2006
(Annual analysis)

Based on the rights of state registration quantity deals implemented in the year of 2007 in real estate sphere of the Republic, as well as real estate market, contract price, rent volume, their dynamic change and analysis we can come to a conclusion, that the real estate market of our country has a tendency of development  and price increase in 2006. Surveys on real estate market show, that starting from the year of 2000 the following factors show continuous essential influence on the activation of civil circulation process of real estate in the Republic:

• Certain stabilization of social-economical, political situation;
• Current level of implementation of construction and investment projects;
• Certain improvement of legislative field;
• Contraction of service timeline for the implementation of deals, the decrease of price paid for them;
• Acception of normative legal acts that result from RA land legislature;

• Legalization of squat buildings;
• Implementation of licensing process of real estate market members, i.e. realtors, real estate evaluators, people in charge of  topography mapping  and land constructors;
• Continuation of works on real estate first state registrations.

In the scope of last years, the quantitative change/dynamics of state registration rights coming from real estate deals has a tendency to grow. This way, in 2000 there were 30228, in 2001 - 44792, in 2002 - 60874, in 2003 - 71797, in 2004 - 98345, in 2005 - 122545, in 2006 – 124568 state registrations rights coming from the real estate deals.
In 2006, as compared to 2005, quantitative increase of state registrations made 1.7%. From the annual perspective of year 2006, the quantitative change/dynamics of state registration rights resulting from real estate deals also shows growing tendency. Monthly average balanced growth of total number of deals makes 0.14%.
Compared to 2005-2006 the quantitative alteration and tendency of real estate deals has the following pictures:

p.1 graph

During the year of 2006 34.8% of real estate deals were made on apartments in residential buildings. 43.3% of total number of deals was registered in Yerevan. Amortization deals have a big specific gravity in state register of real estate rights: 41.2%.
Volumes of deals in real estate for the year of 2006 have the following distribution by marzes:
P2. Graph1

Types of real estate deals for the year of 2006 have the following distribution:
P2. Graph 2

87.9 % of 51284 amortization real estate deals carried out in 2006 were purchase and sale deals, 11.4% were donations and 0.7% exchanges. 37.4% of real estate amortization deals were registered in Yerevan, 37.6% for apartments in residential buildings.
In 2006, as compared to 2005, number of real estate amortization deals increased for 20.2 %. In 2006, out of 16277 real estate purchase and sale deals registered in Yerevan 64.2% were carried out for apartments in residential buildings. Comparing to 2005, number of purchase and sale deals of residential building apartments in Yerevan increased for 13.9%.
As a result of purchase and sale (contract) prices for the sold residential building apartments in Yerevan during the year of 2006, as well as the price analysis suggested by the realty agencies the following market average prices and their change interval  were formulated for 1 square meter of apartments:

Investigation on price index change allows conclude that in 2006 in Yerevan, as compared to 2005 average market price for 1 square meter of residential building apartment increased for 29.0%.
During the year of 2006 the quantitative changes of state registrations rights for residential building apartment amortization and purchase and sale deals in Yerevan shows growing tendency.
In 2006, for the exception of Yerevan, 5637 apartments in residential buildings were sold in marzes, the number of which increased for 11.4% as compared to 2005.
For 2006, in the cities of Republic, except for Yerevan, the prices for purchase and sale (contract) of residential building apartments and according to the analysis of prices offered by realty agencies, the following average market prices and their change interval were defined for 1 square meter of apartment:

In 2006, as compared to 2005, in the cities of Republic, except for Yerevan, average price increase for 1 square meter of apartment in residential building is 43. 4%.
Quantitative changes of state registration rights that come from amortization and purchase-sale deals of apartments in residential buildings shows growing tendency in the marzes of Republic for the year of 2006.
During 2006, 5474 purchase-sale deals for private houses were registered throughout Republic, 1264 of which in Yerevan, 4210 in all the marzes altogether. Compared with 2005, number of deals of purchase-sale of private houses has increased for 7.8%, including 3.2% decrease in Yerevan, increase in the rest of marzes altoghether – 11.6%.

Purchase-sale (contract) prices of average square private houses (250 sq.m) and homestead land (400 sq.m) in the communities of Yerevan, as well as the analysis of prices suggested by realty agencies resulted in the following market prices for 2006 which is calculated by 1 sq.m. of the building, including the unit price of homestead land and their change interval.

Survey on price index change allows us to conclude, that average market price for 1 square meter of private houses (including the unit price of homestead land) in Yerevan during the year of 2006 increased annually for 24.8%.
During the year of 2006 quantitative changes on state registration rights coming from amortization and purchase-sale deals of private houses in Yerevan show growing tendency.
Purchase-sale (contract) prices of private houses with average square building (200.0 square meters) and 1000 sq.meters of homestead land in the cities of Republic, excluding Yerevan, as well as the analysis of prices suggested by realty agencies define the following market prices for 2006 – calculated by 1 square meter of building, including the unit price of homestead land and their change interval.

In all the cities of Republic, excluding Yerevan, average market price of 1 square meter of private housing buildings (including the unit price of homestead land) annually increased for 38.5% in 2006.
Quantitative changes of state registration rights coming from amortization and purchase-sale deals of private houses implemented in marzes during 2006 show tendency to grow.
In general, 19459 unit of land/23293.08 hectare/ was amortized in Republic during the year of 2006, out of which 1987 units /564.87 hectare/ in Yerevan.  This number includes land that was amortized according to the 23rd article of RA land legislation amendment. According to this amendment 1205 unit /506.25 hectare/ land was amortized 718 unit /421.14 hectare/ of which in Yerevan. The amortized land was distributed the following way according to their on purpose use:

• Agricultural lands- 8889 units /21778.04 hectare/, out of which 14 units /1.57 hectare/ in Yerevan
• Residential encumber lands - 6912 units /665.75 hectare/,out of which 1o57 units  /107.05 hectare/ in Yerevan
• Public encumber lands -3117 units /485.51 hectare/, out of which 730 units  /235.46/ in Yerevan
• Industrial establishment lands- 371 unit /312.39 hectare/, out of which 186 units /220.80 hectare/ in Yerevan
• Public health and  lands for rest under special protection-122 units /40.83 hectare/
• Lands of energy establishments designed for water power plants- 48 units  /10.56 hectare/

In 2006 purchase-sale deals for 19459 units /23293.08 hectare/ of amortized land was carried out in Republic, 18370 units /22439.12 hectare/ was purchased-sold;  out of which 1886 unit /552.94 hectare/ in Yerevan; donation deals – 933 units /775.43 hectare/, out of which 74 units /9.72 hectare/ in Yerevan; and exchange deals - 143 units /52.14 hectare/, out of which 27 units /2.20 hectare/ in Yerevan. In 2006, 13 rental right amortization deals /26.39 hectare/ were registered in the Republic.
In 2006, 37.7% of 18370 unit /22439.12 hectare/  of sold lands or 6930 deals /12329.78 hectare/ were lands owned by state or community, 826 units /425.23 hectare/ of which in Yerevan. 62.3% or 11440 units /10109.33 hectare/ were privately owned, 1052 units /125.12 hectare/ of which in Yerevan.

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