Brokerages Control Property Value and Determine Pricing in Chaotic Real Estate Market

According to the newspaper "Zhoghovourd," the situation in the real estate market is chaotic. Prices for apartments in Armenia are being artificially inflated, while just a month of observation shows that real estate transactions have decreased, meaning there are many apartments for sale but no buyers.

The newspaper learned from the Statistical Committee of Armenia that in August of this year, there were 15,507 real estate transactions, whereas in July there had been 16,073. This indicates a decrease of 566 transactions over the course of a month. Despite this, apartment prices in the country are sharply rising day by day. For example, in Yerevan's Central administrative district, the price per square meter for multi-apartment buildings was 612,000 AMD in August, compared to 605,000 AMD in July.

It is notable and worthy of attention that in a single month, the price per square meter for a home rose by 7,000 AMD. Why is this happening? Who is driving this stagnation in the market, artificially inflating prices while transactions plummet? How is this movement being monitored?

Prime Minister Pashinyan recently urged Armenians in the U.S. that if they do not plan to permanently relocate to Armenia, at least they should buy a home here and have property in their native land. Interestingly, even after this announcement, the steady rise in prices continues.

Is it sabotage? It is known that the main price setters in the housing market are not the owners or sellers of homes, apartments, or land plots but rather intermediaries - the brokers. In other words, brokers control people's property and determine what price to offer for whom or how much to discount.

For instance, in July of this year, the price per square meter for an apartment in the Kanakerr-Zeytun administrative district was 305,000 AMD, while in August it rose to 309,500 AMD. In contrast, last August in this district, the price per square meter for apartments was 279,200 AMD. Thus, there has been an increase of 30,300 AMD over the course of a year. It should be noted that price increases have been registered across all administrative districts of Yerevan.

The trend of increasing prices and the drop in transactions is nearly identical in the regions as well. And the question arises, how long will this chaotic situation continue, where is the border? Who ultimately grants these brokers their 'monopoly'?

For more details, refer to today’s edition of the newspaper.