Armenian banks have created buffers of approximately $500 million due to real estate market risks: Central Bank Governor
24.06.2026,
18:33
Armenia's banking system has created buffers of 180-190 billion drams (approximately $490-515 million) to address potential risks associated with the real estate market and construction sector, Central Bank Governor Martin Galstyan said on Public Television.
YEREVAN, June 24. /ARKA/. Armenia's banking system has created buffers of 180-190 billion drams (approximately $490-515 million) to address potential risks associated with the real estate market and construction sector, Central Bank Governor Martin Galstyan said on Public Television.
According to him, to mitigate risks, the Central Bank has required banks to allocate a portion of their profits not for distribution but for capital—to create additional "safety cushions."
Galstyan noted that such buffers will allow the financial system to navigate potential difficulties more smoothly.
The regulator's head emphasized that the main risk is not so much the increase in construction, but rather the potential for a sharp correction in real estate prices.
"Financial collapses usually occur when prices fall sharply," he said. Galstyan recalled that in recent years, amid the gradual winding down of the income tax refund program for home purchases in Yerevan and the shift in focus to the regions, the Central Bank had certain concerns. One possible scenario envisioned a sharp decline in real estate prices, which could have created difficulties for both mortgage borrowers and construction companies.
"Fortunately, most of the risks we anticipated have not materialized. We are seeing only minor price adjustments and see that the real estate market remains quite vibrant," the head of the Central Bank noted.
According to Armstat, the volume of construction in Armenia in the first four months of 2026 amounted to 144.6 billion drams, an increase of 22.9% compared to the same period last year.
According to him, to mitigate risks, the Central Bank has required banks to allocate a portion of their profits not for distribution but for capital—to create additional "safety cushions."
Galstyan noted that such buffers will allow the financial system to navigate potential difficulties more smoothly.
The regulator's head emphasized that the main risk is not so much the increase in construction, but rather the potential for a sharp correction in real estate prices.
"Financial collapses usually occur when prices fall sharply," he said. Galstyan recalled that in recent years, amid the gradual winding down of the income tax refund program for home purchases in Yerevan and the shift in focus to the regions, the Central Bank had certain concerns. One possible scenario envisioned a sharp decline in real estate prices, which could have created difficulties for both mortgage borrowers and construction companies.
"Fortunately, most of the risks we anticipated have not materialized. We are seeing only minor price adjustments and see that the real estate market remains quite vibrant," the head of the Central Bank noted.
According to Armstat, the volume of construction in Armenia in the first four months of 2026 amounted to 144.6 billion drams, an increase of 22.9% compared to the same period last year.
