A portion of the housing stock was badly damaged in the 1988 Spitak earthquake. The numbers demonstrate that the pace at which market economy in Armenia is able to produce housing (on average, an increase of 497 multiapartment buildings every five years) is much lower than that of the Soviet planned economy (on average, 1938 new multiapartment buildings every five years).
Additionally, the output has considerably suffered as a result of the global financial crisis of 2008 – with a decrease of over 80% in the subsequent decade. Considering this and the average life span attributed to the buildings in the country, it is now that a housing replacement/repair strategy needs to be outlined.
There is no recent comprehensive study revealing the current state of all the multiapartment buildings in the country, leaving us to make do with bits of data coming from private organizations and researchers put together. As of 2019, there still were a total of 614 confirmed dangerous buildings of 3-rd and 4-th degrees. The latter is considered damaged beyond repair and can only be demolished. In addition, the buildings built prior to the 1988 Spitak earthquake were constructed to seismic codes designed for lower magnitudes.
A preliminary analysis suggests that a fifth of the nearly 4800 multi-apartment buildings in the capital are bound to collapse in case of a strong seismic event, another 60% can be reinforced to achieve resistance, while only the remaining 20% are expected to withstand the earthquake without collapsing.
According to the housing census data for 2020, the housing stock totals 98,642 K sqm of dwelling area, around 27% of which is in Yerevan.
During 2000-2020, the supply has been slow, with the overall trend going downward even in the most prolific decade preceding the 2008 housing crisis, which is explained by the abatement of the dangerous buildings. There is no accurate data regarding the occupancy rate of both old- and new built multi-apartment houses, but the seeming shortage along with the disproportionately larger amount of the new units being built in the capital is continuously driving the prices up.
These numbers do not necessarily reflect the demand for newer housing in other provinces but rather stem from greater profitability from land development in the capital along with lack of access to mortgage subsidy programmes for households wishing to improve their housing circumstances elsewhere in the country.
Statistics for residential property transactions volume (both in multi-apartment buildings and single-family homes) show a growing trend both in the capital and other provinces. However, in most years, the volume of transactions in the capital alone exceeds the cumulative volume in all other provinces. The uncertainties brought about by the chain of events of 2020 are perfectly reflected in the plummeted activity in the housing sector, which, however, picked up almost to the 2019 mark by the end of 2021.
In terms of operational affordability, around 30% of households in the country are considered energy poor (wherein over 10% of income goes to cover bills for energy).
A case-based investigation by Hetq observed that during the heating season, the lowest-income households in Yerevan spend over 70% of their income towards utility bills, with the average being around a third of the monthly income in all income groups. Among other factors, such inflated numbers are also due to the poor energy performance of the housing stock.
In most of the multi-apartment buildings, the external walls do not meet the national requirement for heat-flow resistance set at 1.8-3.4 m2˚C/W, depending on climate zone and heating period: 23.1% of the buildings are constructed with prefabricated panels that provide a thermal resistance of 1.58m2˚C/W at best, and another 69.2% have stone walls wherein a 600mm “midis” wall provides an R-value of 1.144 m2˚C/W.
Several pilot projects carried out by UNDP demonstrated a potential for reducing energy consumption by up to 50% by retrofitting prefabricated panel buildings.
The affordable price tag: the Calculation