In November 2022, the number of sales in the real estate market in Tashkent increased by 8% compared to the same period of last year
Tashkent, Uzbekistan (UzDaily.com) -- Experts from the Institute for Forecasting and Macroeconomic Research (IPMI) analyzed changes in housing prices in Tashkent in November 2022.
In November 2022, the number of sales in the real estate market in Tashkent increased by 8% (from 7,814 to 8,408) compared to the same period of last year.
During this period, prices for 1 sq. meter increased by an average of 27%: if this figure in November 2021 was US$849, then in November 2022 it reached US$1078.
In five districts of Tashkent, prices for 1 sq. meter of housing is much higher than the average for the city (US$1078): in Mirabad district - US$1285 (+20%), Yakkasaray - US$1178 (+9%), Shaykhantakhur - US$1144 (+6%), in Mirzo-Ulugbek - US$1137 US$ (+6%), in Yunusabad - US$1117 (+4%).
For 9 months of 2022, the average salary in the city of Tashkent reached 5.9 million soums, an increase of 32.5% compared to the corresponding period of 2021. Given that the annual inflation rate for this period was 12.2%, real wage growth was 20.3%. During this period, the exchange rate of the Uzbek sum against the US dollar changed from 10,672.30 soums to 10,973.39 soums (an increase of 2.8%) per US$1.
In November 2022, the average price of 2-room renovated housing was US$55.7 thousand (in November 2021 - US$41.6 thousand). The increase in demand for housing in Tashkent can be explained by the relatively better social infrastructure for living. It should also be noted that the birth rate has also increased significantly. That is, if the number of children per woman in Tashkent in 2010 was 1.99, then in 2021 this figure reached 3.02. This indicator can also be important in shaping the family’s desire to move to a larger apartment.
In September-October 2022, IPMI experts conducted a survey to determine the cause of the high birth rate in our country. It was attended by 200 women aged 25-45 with 3 or more children living in the city of Tashkent and the Tashkent region. According to the results of the survey, the state of health (43.8%) and improvement in living conditions (47.9%) were indicated as the main reasons for making a decision to have a child.
In the context of rising prices in the real estate market, the expansion of government programs to provide housing for the population is the main reason for maintaining activity in the market. For 9 months of 2022, banks allocated mortgage loans to the population in the amount of 10.3 trillion soums, which is 68% more than in the corresponding period of 2021.
According to the Mortgage Refinancing Company of Uzbekistan (UzIKMC), 73.1% of mortgage loans issued in the period from the 4th quarter of 2020 to the 3rd quarter of 2022 were financed by the Ministry of Finance, 16.8% - by the banks’ own funds, and 10.1% - at the expense of UzIKMK.
In a review published earlier, IPMI attributed the rapid rise in housing prices in the city of Tashkent to the fact that this market is speculative. That is, on the demand side, in addition to the number of children, income and migration factors, the growth in housing prices indicates the limited financial instruments for channeling the population’s savings into investments. That is, the weak development of the capital market in our country makes the population with long-term savings direct their money to invest in real estate.
At the same time, house prices are falling globally. The reasons for this are the increase in the basic cost of living, the increase in interest rates, rising unemployment and other factors.
Note. The data for this analysis were obtained from the website www.olx.uz using the web-scraping method. 113.5 thousand observations collected in 2020-2022 were studied.