Armenia’s real estate market faces the risk of overheating
June 13 2025, 19:12
The Central Bank of Armenia is raising concerns about financial stability risks. In its respective assessment, the bank highlights a number of risks.
One of these risks is the increasing credit burden on households. However, the Central Bank notes that this risk is somewhat mitigated by the long-term nature of these loans.
Possible developments related to the risks of a warming real estate market—large volumes of lending to developers could pose challenges if the market overheats. One of the dangers of a warming market is oversupply in the real estate market. In other words, if developers are unable to sell their real estate in full, they may have problems meeting their own credit obligations, which will affect their financial stability.
All of this is unfolding against the backdrop of slowing economic growth, geopolitical uncertainty, and trade and economic tensions, according to the Central Bank.
Once again, the Central Bank has sounded the alarm about the risk of overheating in the real estate market. At the same time, it is not the first time that the Central Bank has warned of these and other risks. Among the above-mentioned, we can recall numerous statements of the Central Bank about the inefficiency of capital expenditures. In this sense, the Central Bank is much more objective and sincere.
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