The situation in the field of construction is quite deteriorating.Tigran Harutyunyan, a member of the board of the “Armenian Association of Builders” NGO, announced at the hearings on the topic of raising building permit rates in the National Assembly.
He presented the data of the quarter of the previous year,according to which a 25 percent decrease in the sale of real estate was recorded in the republic.
“We see that there is a tendency for sales to decrease,” he said.
Tigran Harutyunyan also spoke about the very bad condition of external networks: gas, electricity, water connections.
“In othre words, if you start a new urban advancement project in Yerevan and apply for a technical condition for water, you will be sent to Hrazdan today to bring a water line from the citizens,” he said.
According to him, the tariff for the connection of the HPP has increased 5 times, regarding the gas connection, “Gazprom Armenia” says that the capacities of the gas pipeline are not sufficient, a new gas pipeline should be built.
“Let’s look at the situation in the neighboring countries: an apartment in Tbilisi costs about 60 percent cheaper, it costs about half the price, imagine what kind of price difference there is. Such a situation has been created and in this situation we notice a clear trend of sales decrease. There are large urban development projects, and if a problem occurs in a large project, according to the domino principle, the problem will occur in the entire sector,” he said.
How do rising tariffs for utility connections impact real estate progress in Armenia?
Interview with Tigran Harutyunyan: The Current State of Construction in Armenia
editor: Welcome, Tigran Harutyunyan, and thank you for joining us today to discuss the pressing issues facing the construction sector in Armenia. Your insights as a board member of the “Armenian Association of Builders” NGO are invaluable. Let’s dive right in. What is the current state of the construction industry in Armenia?
Tigran harutyunyan: Thank you for having me. Unfortunately, the situation is quite deteriorating. Recent hearings in the National Assembly highlighted significant concerns, primarily tied to a notable 25 percent decrease in real estate sales recorded over the last quarter. This trend is alarming and indicates a persistent decline in the market.
Editor: That’s a substantial decrease. What do you attribute this downward trend in sales to?
Tigran Harutyunyan: There are multiple factors at play. A critical issue is the very bad condition of external networks—namely gas, electricity, and water connections.When developers initiate new urban advancement projects in Yerevan, they often find themselves needing to apply for technical conditions. For example, if you request a water connection, you may be sent to Hrazdan, which means bringing a water line from citizens who are far away. Such logistical challenges add hurdles for developers.
Editor: It sounds like infrastructure limitations are a major concern. Are there any developments regarding connection tariffs that might impact the construction industry?
Tigran Harutyunyan: Yes, absolutely. The tariffs for connections have increased dramatically; as an example, the tariff for connecting hydropower plants has surged five times. With regard to gas connections, “Gazprom Armenia” has indicated that the current capacities of the gas pipeline are insufficient, necessitating the construction of a new pipeline. This compounded cost burden discourages new investments in construction.
Editor: Looking at regional comparisons, you mentioned that apartment prices in neighboring Tbilisi are substantially lower. How does this disparity affect the real estate market in Armenia?
Tigran Harutyunyan: The difference is striking; an apartment in Tbilisi is roughly 60 percent cheaper, with some prices being nearly halved compared to Yerevan. This creates a challenging scenario for our local market, as potential buyers may opt for more affordable options across the border. If buyers perceive that they can get better value elsewhere, this will lead to continued decreases in property sales, further exacerbating our situation.
Editor: Given these challenges, what advice would you give to stakeholders in the construction and real estate sectors?
Tigran Harutyunyan: stakeholders must adapt to the current challenges by being proactive and innovative. It’s crucial to engage with policymakers to address infrastructure issues and to advocate for improved tariffs and conditions for utility connections.Collaboration among builders can also lead to shared solutions when facing obstacles. Additionally, being transparent and forthright with potential buyers about market conditions will build trust and help maintain a loyal customer base.
Editor: Thank you, Tigran, for those insights.It truly seems that while the construction sector in Armenia faces significant hurdles, there are also avenues for enhancement that can be explored. We appreciate you sharing your expertise on this crucial topic.
tigran Harutyunyan: thank you for having me. It’s essential that we continue the conversation about improving the construction landscape in Armenia for the benefit of all stakeholders involved.