IPMI experts analyzed the prices for apartments in Tashkent for the 4th quarter of 2022

Tashkent, Uzbekistan (UzDaily.com) – Experts from the Institute for Forecasting and Macroeconomic Research (IPMI) analyzed the prices for apartments in Tashkent for the 4th quarter of 2022.

The results showed that prices rose by 2% in November compared to October and by 3.2% in December compared to November.

According to the E-notarius information portal, in the 4th quarter of 2022, 33,194 housing purchase and sale agreements were concluded in Tashkent. During this period, prices increased on average by 7.1% in Shaykhontokhur district, by 4% in Chilanzar, by 3.8% in Yunusabad, by 2% in Uchtepa, Yakkasaray, Yashnabad and Almazar districts, by 1% in Sergeli and Mirabad and by 0.5% in Mirzo-Ulugbek districts.

The average cost per square meter of an apartment in Tashkent was US$1,088. In four districts of the capital, this figure was higher than the average for the city: Mirabad (US$1,326), Yakkasaray (US$1,195), Mirzo-Ulugbek (US$1,174) and Yunusabad (US$1,128).

In addition, the main factors affecting the cost of an apartment were identified. For this, a supervised machine learning model was used: a decision tree combined with bagging and random forest methods.

The results showed that the area of the apartment remains a key factor influencing the cost of the apartment, in both affordable and expensive housing segments. This can be explained by the high prices for land plots in urban areas. In other words, the cost of purchasing a land plot makes up the bulk of the cost of building a residential building.

In the affordable housing segment, another important pricing factor is the floor on which the apartment is located. This is due to the fact that the residential buildings in which such apartments are located are mostly old and not equipped with elevators. On the other hand, problems with water and heat supply of the upper floors also affect the cost of the apartment. Slightly less important pricing factors were the state of repair and the fact whether the apartment is in a new building.

In the expensive segment of housing, another factor affecting the cost of an apartment is the presence of a real estate agency or realtor. The cost of their services can significantly affect the final cost of the apartment.

Other factors are the furnishing, the commission fee and the fact that the apartment is in a new building. The floor on which the apartment is located has the least impact on the cost of the expensive segment due to the presence of elevators and the absence of problems with utilities.

In conclusion, given that apartments in new buildings are rented to buyers in a "boxed" or unfinished state, in many cases the cost of land acquisition and permit procedures have a large weight in the cost of an apartment. Since all residents can use the facade, elevators, and amenities in the entrances in the same way, the difference in payment in many cases occurs due to the area of the apartment. Accordingly, lower costs for land acquisition and permitting procedures and other related fees could lead to lower housing prices. For example, the relationship between such spending and housing prices is found in the United States. Moreover, in addition to lowering the cost of building materials, lowering mediation costs by creating portals that connect buyers and sellers will also help reduce the cost of apartments.

It is worth noting that according to the new rules for the entry and exit of foreign citizens, which entered into force in Kazakhstan on 26 January 2023, citizens of the member states of the Eurasian Economic Union are allowed to stay in the country for 90 days within a 180-day period. From the announcement of mobilization in Russia until the end of 2022, more than 36,000 Russians received permission to temporarily stay in Kazakhstan. Accordingly, such changes in neighboring countries cannot but affect the state of the real estate market in Uzbekistan.