Despite the construction boom in Tashkent, why are prices continuing to rise?
No matter which corner of the capital you visit, you will witness new multi-story buildings rising. However, against the backdrop of such massive construction volume, housing prices are continuing to rise at a high rate instead of falling. The Central Bank of Uzbekistan has presented its new report on the Tashkent real estate market, revealing the true reasons for this paradox. Zamin.uz has compiled the answers to the most important questions that interest buyers.
The main paradox: Households and supply shortages
Even though many houses are being built, the relentless rise in prices is primarily caused by demographic and migration factors.
Reason for the shortage: Internal migration and investment demand in the capital remain consistently high. Most importantly, the growth rate of new households (families) in the city is significantly outpacing the commissioning of new housing. Simply put, the real need for housing is higher than the speed of construction, creating a shortage in the market.
Prices and contracts: What do the numbers say?
In the January-March period of this year, real activity was observed in the Tashkent real estate market. The main indicators for the capital were as follows:
Indicator type | Recorded numbers and changes |
Purchase and sale transactions | 32.8 thousand contracts were signed (30 percent of the total volume in the Republic). An increase of 64 percent compared to last year! |
Newly built houses (Primary market) | Increased by 8.1 percent in dollar terms. |
Secondary market | Increased by 9.4 percent in dollar terms. |
Housing rent | Increased by 6.9 percent in dollar terms, and by only 0.6 percent in soums. |
Land plots (per sotix) | Due to the expansion of supply in the outskirts of the city, it decreased by an average of 6.4 percent, amounting to 301 million soums. |
Abnormal activity in March and the "Escrow factor"
At the end of the first quarter, especially in March, the number of transactions rose unexpectedly sharply. This is related to a new economic order.
Buyers rushed to finalize documentation before April 1, the deadline for the introduction of mandatory escrow accounts in real estate purchase and sale processes. This rush before the new rule came into effect created a strong wave of activity in the market.
Urbanization: Tashkent is growing upwards
The scale of construction and the architectural form of buildings in the capital are also changing in line with modern requirements:
Construction scale: Currently, more than 300 large multi-story residential complexes are being built in the city simultaneously.
Number of floors: Tashkent is the clear leader in the country in terms of multi-story construction. 36 percent of all newly built buildings are modern structures that are taller than 13 floors.
In conclusion, it can be said that as long as there is strong investment attractiveness and a constant flow of population, both the demand for housing in Tashkent and its price will remain high.
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