Property Prices

Apartments in the central district of Yerevan (average price for one sq.m.). Source: official website of the Cadastre Committee. AMD/USD conversion according to the rates published by the Central Bank.

According to official statistics published by the Cadastral Office, the real estate market in the center of Yerevan has demonstrated significant growth, with a notable increase in the last year. From April 2023 to March 2024, average prices per square meter in the city center rose from $2,102 to $2,295, reflecting a 9.2% annual increase. This steady upward trend is part of a larger surge observed over the last decade, where prices soared from $1,021 in 2012 to $2,073 in 2023, totaling a 103% increase. This growth was particularly marked by a dramatic 42.4% rise from 2021 to 2022.

Key factors for recent price increases:

1. Growing Economy: Armenia's GDP grew by 8․7% in 2023.

2. Lower Mortgage Rates: Interest rates dropped from 18% to around 10.5% and are expected to decrease further.

3. Rising Rental Demand: Tourism and urbanization drove higher demand for rental properties.

4. Shift from Bank Deposits: Real estate became a more attractive investment due to declining deposit interest rates.

5. Limited New Construction: Central Yerevan experienced limited new dwelling construction.

Foreign Ownership of Real Estate

Foreigners enjoy unrestricted ownership rights when it comes to real estate in Armenia. They have the full spectrum of privileges, including acquisition, retention, leasing, sale, inheritance, and other property-related activities, on an equal footing with local residents. Remarkably, there's no obligation for foreigners to secure a residence permit or demonstrate any specific ties to Armenia.

Moreover, investing in real estate can open doors to securing a temporary or permanent residence permit in Armenia, enhancing the appeal of property investment for foreign individuals. However, it's important to note that there is a unique restriction on foreign ownership that applies solely to agricultural land. To navigate this restriction, foreign investors may need to establish a legal entity and acquire agricultural land under the entity's name.

Alternatively, foreign individuals with special residency status in Armenia are permitted to directly own agricultural land.

Real Estate Acquisition Process

Considerations for Property Acquisition

When purchasing real estate in Armenia, it's generally a safe process, but taking specific precautions is advisable:

Marital Status: Be aware of the seller's marital status. If married or divorced, the spouse's consent may be necessary for the sale. Even if the property was not acquired during marriage, the spouse or ex-spouse could claim contributions to property improvements. Armenia does not recognize common law marriages, but marriages from foreign countries may pose complications.

Gifts & Inheritance: Investigate whether the property was inherited or received as a gift. Other family members may contest wills or gifts, potentially affecting the sale. If children are involved, the transaction may need approval from the guardianship authority to ensure it's in the child's best interest.

Capacity to Contract: Pay attention to the seller's behavior. Armenian law allows courts to declare people with mental disabilities as incapable. Those addicted to drugs, alcohol, or gambling may have limited capacity, and agreements with them could be contested. Checking court records or obtaining a certificate of mental health may be prudent.

Insolvency: If the seller appears to be in financial distress and sells below market value, they might be declared bankrupt soon after the sale. A bankruptcy trustee could challenge the sale within three years. Ensure the likelihood of bankruptcy is low when purchasing property at a discount.

Encumbrances and Litigation: While the Cadastre issues a clean title certificate confirming no mortgages or encumbrances, verify whether the seller is involved in any property-related litigation before signing the sale agreement.

Preceding Transactions: Examine the property's history for any suspicious activities, like frequent transfers within a short period. Even older transactions can be scrutinized in Armenia, particularly acquisitions via donations, inheritance, or privatization.

Tax Liabilities and Utility Bills: The seller is obligated to provide a certificate confirming the absence of tax liabilities from the local municipality. While new owners are not responsible for prior unpaid utility bills per law, it might be challenging to establish new contracts with utility companies if the old bills remain unpaid. Request statements confirming all utility bills are settled.

Notarization: Consider having the sale contract notarized, even if not strictly required. Notaries are personally liable for malpractice and conduct necessary checks, such as consent, valid powers of attorney, and the seller's mental capacity. Notarization demonstrates good faith if disputes arise.

Escrow Accounts: Instead of the common practice of cash payments during the notary's office signing, consider using an escrow account or a similar tool. This avoids carrying large sums in cash and allows verification of currency authenticity. Escrow accounts incur additional bank charges and currency conversion costs, but they can provide security and transparency in the transaction process. Refer to "Payment Methods" for more details.