Second President Robert Kocharyan has explained the reasons of the recent years’ construction decline in Armenia, opposing to the arguments brought by Prime Minister Tigran Sargsyan at the recent end-of year news conference.
In an interview with 2rd.am, Kocharyan pointed out to three main factors, noting that the incumbent prime minister’s explanations have nothing to with the reality.
The interview is provided below.
Mr President, though the New Year and Christmas holidays are drawing near, Prime Minister Tigran Sargsyan’s press conference continues to remain in the media spotlight. It is interesting to know if any answers or comments made during the press conference have attracted your attention.
I will focus on one episode today. What caught my attention was the prime minster’s response to a journalist’s question about the past five years’ continuing decline in the construction volumes in the republic. Since the premier’s explanation was unrelated with what we are facing now, I will try to respond to that question myself.
So what has caused the uninterrupted unflinching decline in the construction volumes in the past five years?
1. The population’s exodus (I don’t point to figures not to spoil the festive mood). The potential buyers of new apartments leave, reducing the demand on the real estate market. In the meantime, the apartments of those families inevitably appear on the secondary market, creating a surplus of supply. The reduced demand for property and the drop in prices have seriously shaken the investment attractiveness in the development sector. So the enumerated factors have suppressed the delayed apartment demand effect since the sharp phase of the 2009 recession.
2. The essential deterioration of mortgage loan terms (if they can be termed that way, at all). If we compare the terms we had in 2004-2007 with what we have today, you will see that few people in their right senses would dare to benefit from the “mortgage loan”. And the essential increase of the impoverished population which cannot even dream of purchasing an apartment – let alone mortgage loans – adds to this.
3. Out citizens’ mood. The apathy, the feeling of helplessness and the lack of trust in future have come to steadily influence people’s behavior and motivation. Studies reveal that exactly 40 percent of Armenia’s population intends to permanently move [to another place] once such an opportunity emerges. Anyone inclined to leaving [the country] never purchases property in a country or town he or she intends to quit. The same goes for business initiatives.
So these are the reasons behind the steady decline in the construction volumes. Everything is more than clear and comprehensible. And the former government is not to blame for this; neither are certain aliens. The crisis too, is very far away now. So there’s no way to avoid responsibility here.