Tashkent, Uzbekistan (UzDaily.com) -- From April to June 2021, 38 percent more transactions were concluded in Uzbekistan under contracts for the sale and purchase of real estate than in January-March. About a third of them are in the city of Tashkent. This is stated in the report "Review of the real estate market in Uzbekistan".

At the same time, prices have increased in the secondary housing market. Preliminary results for the second quarter of this year showed that prices in the republic on average increased by 5.72 percent compared to the previous quarter. This noticeable rise in price is observed in many regions of Uzbekistan.

During the period of the pandemic and quarantine, the forced restrictions led to the postponement of planned purchases to a later date ("the effect of deferred demand"), which could lead to a slowdown in consumer demand in the economy and an increase in savings activity.

In addition, in the context of a relative stabilization of the exchange rate, the real estate market, as an alternative source of income, has become a more highly profitable source of investment for entrepreneurs and part of the population with sufficient savings.

The activation of the real estate market on the demand side, due to the elimination of administrative barriers to the acquisition of housing in the capital, also influenced the rise in prices.

During the pandemic, all regulators - both in developed and developing countries - began to simultaneously soften monetary policy, which triggered an inflow of funds into assets, including real estate. When rising inflation becomes the main concern of investors and the public around the world, real estate is viewed as a defensive asset. Therefore, central banks are closely monitoring changes in prices in the real estate market.

It is important to understand the overvalued housing market. Despite the fact that in absolute terms, the average real estate prices are among the lowest, taking into account the standard of living, housing prices in the country are still high compared to the CIS countries and Georgia.

Thus, the ratio of the average price of real estate in the capital of Uzbekistan to GDP per capita (in purchasing power parity) is 12%. This is the third highest indicator after Moscow (Russia) - 15.8% and Bishkek (Kyrgyzstan) - 13.4%.

Relatively low rates are noted in Nur-Sultan and Tbilisi, 3.3% and 6.4%, respectively.

The above factors may indirectly indicate relatively high prices in Tashkent in comparison with the capital cities of countries with higher per capita incomes.

It should be noted that, despite the relatively high level of prices for real estate in the capital, prices in this market over the past 12 months were formed without sharp price fluctuations.

The median values of prices are in the range of 6.4 - 6.7 million soums per 1 quarter. m., and average prices have a positive growth trend in the range of 2-3 percent.

Tough measures set by countries to combat COVID-19 at first puzzled residential property buyers and caused the housing market to stall for a while.

However, already in the third quarter of the previous year, it began to recover due to the formed deferred demand. For this reason, all over the world, house prices are growing at the fastest pace.

Such data are provided by the international consulting company Knight Frank, which has updated the price index for secondary residential real estate in the first quarter of 2021.

According to the study, over the course of 12 months, residential real estate markets continued to demonstrate their resilience, and the average price increase reached 7.3% by March 2021 (+ 4.4% in the same period of the previous year and + 5.6% in the last quarter).

Turkey has the highest annual price increase at 32%, but excluding inflation, real prices in the country are growing at about 16% per year. In addition to Turkey, a significant increase in property prices in the secondary market is mainly observed in developed countries, including New Zealand (22%), USA (13%), Sweden (13%), Austria (12%) and Canada (11%).

In the first quarter of 2021, 12 of the 56 countries surveyed experienced double-digit price increases. In order to avoid "bubbles" in the real estate markets, the governments of several countries are developing measures to contain prices.

For example, since January this year, the authorities in China, New Zealand and Ireland have taken a number of measures to regulate the situation, such as tougher lending rules and higher stamp duties on multiple purchases. China is also discussing the introduction of a national property tax. With government intervention and fiscal stimulus measures due to end later this year in several markets, demand could slow.

However, it should be noted that there are also several large economies that are experiencing a slowdown in property prices. Thus, in Italy (1.6%), India (-1.6%) and Spain (-1.8%), there was a lower price increase in the first quarter of 2021 than a year earlier. This is due to the fact that the country currently has stricter restrictions and excess supply.