By Abdul Kerimkhanov
Recently, the Armenian public has heard it would seem that very encouraging news as country's Urban Planning Committee announced on construction boom expecting Armenia in the coming years.
No doubt, the statement by Vahagn Vermishyan, head of Committee, looks very promisingly. However, the reality of the state of the Armenian construction sector does not inspire optimism. Renovation of the Armenia housing stock is really very relevant, given that about 80 percent of it has long run out of life.
It is impossible to comment perspective speech of Vermishyan without scepticism. Because the factors that hinder the development of the construction industry are much more than incentives. There are much more serious barriers than those legislative and regulatory incentives, thanks to which it is planned to ensure a boom.
Moreover, with the investment climate that has now established in Armenia, it is difficult to expect even a slight revival in the sphere. The unfavorable climate is proved by indicators of a reduction in foreign investment in Armenia.
In addition, the processes unfolding in the judicial and legal sphere suggest that the investment climate in the country will continue to deteriorate. Obviously, the idea of the current Armenian authorities, presented as a reform of the judicial system, cannot be an attractive factor for investors. It will rather scare off investors in the foreseeable future, due to the absolute uncertainty and doubtfulness of its goals.
Against the background of the fact that even local capital is leaking out of the country, the construction boom is nothing more than an illusion.
Armenian Tax policy also reinforces scepticism regarding the prospects for the development of the construction sector. As it is known, the new Armenian authorities decided to raise the real estate tax. This step will be quite a significant blow to the demand in the real estate market. Against the background of the likely decline in demand for real estate in general, it is ridiculous to hope for a new impetus for construction.
Besides, the statistics cites severe data that the outflow of population from Armenia is growing. So, the question arises: for whom to build new houses, if people leave the country, and the repatriation, which the postrevolutionary government promised to provide, does not start yet?
There are a lot of similar obstacles for making a dream about the construction boom in Armenia. But these few are enough to doubt the realism of the voiced intention.
Thus, dream will continue to be a dream in Armenia, as contracts the reality.
Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94
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