Renters in Yerevan Are Facing Volatile Market

“People often see apartments listed at inflated prices without proper quality checks or pricing regulations. As a result, properties that should be more affordable or require renovations are listed at higher prices due to market pressure. Many property owners struggle to correctly assess their home’s value, and the lack of market oversight leads to such pricing issues,” Boyajyan explained.

The influx of Armenians from Artsakh has further contributed to price increases, highlighting the market’s instability and the influence of unpredictable factors.

“All these realities show that the market still lacks stable regulation. People must be cautious when considering rental offers and prices,” Boyajyan added.

Artsakh refugees generally prefer larger apartments (three- or four-room units) rather than one- or two-room apartments. On the other hand, landlords are often hesitant to rent to large families. Prices have risen significantly in districts like Davtashen, Ajapnyak and Erebuni.

Boyajian added that some property owners wait long periods before adjusting their prices, hoping to determine the right market value. Many landlords are reluctant to lower their prices, even when market experts advise them otherwise. This can lead to prolonged negotiations before a rental agreement is reached.

Boyajyan stated, “Ten years ago, it was possible to find an apartment for 50,000 AMD ($127). Today, finding one for even 100,000 AMD ($254) is difficult, while 130,000-140,000 AMD ($331-$356) has become the norm. This price increase is not just seasonal but a result of long-term changes and growing demand.”

Seasonal factors also play a role. Short-term rentals (daily or monthly) require furnished apartments with necessary amenities such as dishes and bedding. Many newcomers look for such move-in-ready properties.

Ultimately, rental or purchase decisions depend on the individual willing to pay the agreed-upon price. The government does not regulate the market, leaving pricing up to landlords and tenants.

Market regulation remains challenging, as various agencies operate with different pricing strategies. Some agents prioritize professionalism, while others focus purely on profit. The real estate industry lacks a centralized governing body. Although an association for real estate agents was established in Armenia a year ago, it does not fully regulate the market.

One tenant,speaking on the condition of anonymity, said she believes that the lack of government oversight in the real estate market is a significant issue.

“Years ago, property owners neither paid income taxes nor declared their rental income. This issue needs political attention. Without proper oversight, market stability cannot be ensured,” she said.

Another real estate agent, Lusine Shahverdyan, pointed out that the Russia-Ukraine war increased rental prices due to the demand from Ukrainian refugees.

“The immigration of diasporan Armenians and rising demand also contributed to the price surge. However, this does not mean the increase will be long-term. Prices are driven by supply and demand. When demand rises, prices go up. When demand decreases, prices should theoretically drop,” she said.

However, she noted that once prices rise, they rarely decline significantly.

“Currently, the market has a certain ‘demand inflation,’ meaning that advertised prices are sometimes higher than actual demand. Listings on social media and rental websites often do not reflect reality. Ultimately, the landlord decides the price. However, if a property remains vacant for months, landlords are forced to lower their prices,” she concluded.

The increase in Armenia’s property tax is not seen as a direct cause of rental price fluctuations. While higher taxes can slightly raise apartment prices in certain areas, they do not necessarily lead to higher rental costs. If tenants cannot afford high rent, landlords must adjust prices accordingly.

A tenant from the provinces shared his experience of renting an apartment in Yerevan for his son, who moved to the capital to attend college.

“The apartment is extremely small, essentially a former dormitory room of 24 square meters, with no kitchen and only a small bathroom. It costs 110,000 AMD ($280) per month. During summer break, my son does not stay there, yet we still have to pay rent. When we asked the landlord for a discount, they refused. The apartment is not even gas-equipped, and we rely on electric heating. Its only advantage is proximity to the metro, allowing my son to reach university on time. We are looking for a more suitable option, but prices remain high, and we fear we won’t find anything better,” he explained.

Kristina Virabyan is an international real estate expert and analyst with the firm Invest by Kristina, said interest from foreign buyers is driving up prices.

One key reason is the growing demand from foreign buyers. Since 2022, a significant number of foreign nationals, mainly from Russia, have relocated to Armenia. Many of them are purchasing apartments, which increases demand and, consequently, prices. Moreover, Yerevan and other major cities are becoming increasingly attractive to investors who see real estate as a secure asset, she said.

With limited supply, the construction sector struggles to meet the rising demand. Although new residential complexes are being built, their completion takes time. This leads to a shortage of quality housing, particularly in the capital, further pushing prices upward.

She also noted that inflation and rising construction material costs have significantly impacted rental prices.

“The global increase in construction material prices, rising logistics costs, and overall inflation make construction more expensive. Developers incorporate these expenses into the price per square meter, affecting overall housing costs,” she said.

When asked whether the market will continue to grow, she said, “Long-term forecasts depend on various factors, including the country’s economic policies, future migration trends, and regional stability. However, in the short term, the upward price trend is likely to persist, especially in Yerevan and areas with high tourism appeal.”