What Caused the Sharp Increase in Construction Volumes? "Zhoghavor"

"Zhoghavor" newspaper reports. According to data published by the Statistical Committee, construction volumes in Armenia increased by nearly 7 billion drams in 2022 compared to 2021. In recent years, there has been no pause in construction, with construction sites and towering cranes present everywhere in both Yerevan and the regions.

There is also a centralization issue in Armenia, meaning that as of 2022, out of the total population of 2,961,000 in the country, 1,092,000 reside in Yerevan. The last time the population of Armenia reached 3 million was in 2015, but even then, there was no construction of housing stock in such quantities. Today, Armenia is facing a serious problem with air pollution caused by dust for this very reason, experts note.

The next issue, which real estate professionals forecast for the next year, is that a collapse in the real estate sector is expected to begin in 2024, as the demand and consumption for housing construction will decrease. Most of the Russians who recently arrived in Armenia, whose work is also linked to part of Armenia's economic growth, have already left the country.

According to sources from the news outlet, builders initially relied on those newcomers and citizens who moved to Armenia for permanent residence, constructing high-rise buildings, “downtowns,” and new neighborhoods, leveling everything to the ground. However, consumption is gradually decreasing. Economist and advocate for small and medium-sized businesses Samson Grigoryan notes that such a scenario is predictable, but it cannot happen in absolute terms: “In such a demand scenario, what is expected is not a sales pause, but a drop in prices. There is supply, the price is low, there is demand, it increases. Moreover, after the cancellation of the income tax refund law, sales may decrease.”