Investments in Armenian Real Estate: Market Analysis, Prices, and Purchase Process

About 68% of apartment transactions in Armenia are in the capital of the country, Yerevan. At the same time, prices per square meter in Yerevan vary from $600 to $2300, depending on the area. In this article, we will consider in detail the process of buying real estate in Armenia, including market analysis, housing prices, and the specifics of the legislation when executing a transaction involving foreigners.

Market Structure and Number of Transactions

According to data from the Republic of Armenia's Statistical Committee, there were 1967 residential real estate purchase and sale transactions in the country as of the end of July 2024, which is 10% more than in June 2024 and 11% more than in July last year.

In total, 12,399 housing transactions have been registered in Armenia since the beginning of the year (for the period from January to July 2024), which is 4.4% more than in January–July 2023.

The structure of the residential real estate transaction market is dominated by purchase and sale transactions involving apartments in multi-apartment buildings. Their monthly share from January to July 2024 varied from 62% in April and May to 72% in February.

According to statistics, in January–July 2024, about 68% of transactions (5,520 transactions) with apartments were made in the country's capital, Yerevan. The remaining 32% or 2,607 transactions, were made in the country's 10 marzes (a marz is an administrative unit of the country, analogous to a region).

Buying Real Estate in Armenia by Foreigners

Foreigners can buy an apartment in Armenia without restrictions, which cannot be said about land plots — it can only be rented for up to 99 years. In addition to owning any type of real estate in Armenia, a foreigner can also freely resell it, rent it out, and pass it on by inheritance.

In January-July 2024, foreign citizens purchased 478 residential properties in Armenia – 331 apartments and 147 houses. During the same period, foreign citizens sold 809 residential properties – 466 apartments and 343 houses.

According to the Statistical Committee, most often residential real estate in Armenia is purchased by citizens of Russia. In 2023, they purchased 721 residential properties — in January–July of this year, they managed to buy 305 housing properties. Next are citizens of European countries, the USA, Iran, and other CIS countries.

Buying real estate does not provide any preferences for obtaining a residence permit (RP) in Armenia. However, it is possible to obtain an RP in Armenia in the event of opening a startup or any company carrying out commercial activities. For example, if an investor is interested in a rental business in Armenia, then for this purpose it is possible to register a company, purchase real estate, and then engage in its rental.

Average Housing Prices in Armenia

Average market prices for apartments in multi-apartment buildings in Armenia in July 2024 have increased significantly compared to the same month in 2023.

First of all, let's look at how average apartment prices have changed in the capital, Yerevan. Let's look at the price change in both the national currency, the Armenian dram (AMD), and the foreign currency, the US dollar (USD).

The administrative district with the highest average price per square meter is Kentron, a central district of Yerevan. Kentron is the most prestigious district of Yerevan, the heart of the Armenian capital. Many historical and cultural attractions are located here. The average price per square meter in July 2024 was 900,000 AMD/sq.m, which is 1.3% less than in June 2024 and 8% more than in July 2023.

The district with the lowest price per square meter is Nubarashen – 229,050 AMD/sq.m: this is 1.3% more than in June of this year and 6.8% more than in July of last year. Average prices for apartments here are almost 4 times less than in Kentron.

Such a low price in Nubarashen is because this district is located at a significant distance from the center of Yerevan and has a much more modest infrastructure than other districts of Yerevan. Also, Nubarashen, along with the Nork-Marash district, is the district with the smallest number of residents — about 12.6 thousand people. In turn, in seven of the twelve districts of Yerevan, the number of residents exceeds 120 thousand.

Average price per square meter in Armenian drams by administrative districts of Yerevan

Average price per square meter in US dollars by administrative districts of Yerevan

The largest cities in Armenia after Yerevan are Gyumri, Vanadzor, Vagharshapat, and Abovyan. In these cities, apartment prices have increased by 6.9–15.5% over the year, depending on the location. The highest average price per square meter among them is in the city of Abovyan — 300,200 AMD / sq.m, + 0.6% compared to June 2024 and + 15.5% compared to July 2023. Next are Vagharshapat — 255,000 AMD/sq.m, 0.4% compared to June of this year and + 6.9% compared to July 2023; Gyumri — 171,000 AMD/sq.m, + 8% compared to July last year; Vanadzor – 148,500 AMD/sq.m, +0.3% compared to June of this year and +11.5% compared to July of last year. Below are the graphs of the change in the average price per square meter of apartments in Armenian drams and US dollars.

Buying Real Estate in Armenia Step by Step

What needs to be done to ensure that the transaction for purchasing residential real estate in Armenia is successful:

1. Collect documents.

Having chosen the object you need, you need to agree with the seller on the price and other terms of the transaction. And, of course, before completing the transaction, you must have all the necessary documents on hand:

• Notarized translation of the buyer's passport and a document confirming the seller's identity.
• Certificate of clear title of the seller.
• An extract confirming that the seller has no outstanding utility debts.
• The account number in a bank in Armenia from which the money will be transferred during the transaction.
• Documentary evidence of the origin of funds.
• Certificate of marital status.

2. Conclude a purchase and sale agreement.

To draw up a sales contract, you and the seller will need to visit a notary office and take all the documents with you.

The sales contract must contain the following:

• Information about the parties entering into the agreement, with all necessary data, including last name, first name, patronymic and passport data.
• Information about the property, including its exact description and an extract from the cadastral register describing the property.
• The price of the property with the indication of the terms and payment scheme.
• Defining the responsibilities of both parties.
• Indication of protection against eviction (possible claims from third parties).
• Signatures of the parties to the transaction and the translator.

3. Register the property rights.

After providing the notary with a copy of the contract and confirming the transfer from the bank, the process of transferring the rights to the property begins. This process usually takes about three to four business days, after which the buyer is issued a certificate confirming his or her ownership of the property.

4. Pay for the transaction.

As of July 1, 2022, a new law came into effect in Armenia that requires cashless payments for all transactions over $10,000 that require transfer of ownership or registration with government agencies.

Otherwise, the transaction may be considered invalid. Therefore, the only way to pay for the property is by wire transfer (from a local account to the seller's account via bank transfers) or a SWIFT transfer from a foreign bank to the seller's account in Armenia.

Note. It is also possible to purchase real estate in Armenia remotely: for this, it is necessary to issue a notarized power of attorney to the person who will physically carry out the transaction. In this case, the registration of the acquired housing will also be his responsibility.

Associated Expenses When Purchasing

Among these are:

• Transfer of ownership: €115.
• Notarized translation of a foreign passport: €7–13.
• Realtor services: on average, 1.5–2.5% of the transaction amount.

The calculation of the property tax is based on the cadastral value of the property, which is as close as possible to the current market value. Every year, property owners must pay a tax, the amount of which is approximately 0–1% of the property value.