22 october 2017

Central Asia news

Real estate in Uzbekistan: The demand is outgrowing supply

09.04.2008 10:39 msk

Ferghana.Ru news agency

Business Uzbekistan

Real estate prices in Uzbekistan keep going up. A one-room apartment in Andijan (Ferghana Valley) that cost $1,500-2,000 a couple of years ago according to unofficial estimates costs $8,000-10,000 nowadays.

Local real estate agents say customers do not even try to bring the price down and buy apartments at whatever price is indicated. They clearly expect prices to continue going up. Real estate agencies attribute it first and foremost to labor immigrants earning money abroad and investing it at home.

Real estate prices in Tashkent are sky-high. A one-room apartment in Yusidabad (outskirts) cost $11,500-14,000 in late 2006 and $16,000-28,000 a year later (39-100% rise). Prices of two-room apartments went up from $18,000-20,500 to $24,000-32,000 (36-56%). Cost of 100 square meters of land in city center went up from $13,000-17,000 to $15,000-40,000 (15-135%). In short, one-room apartments are 45-109%, two-room apartments 42-63%, and three-room apartments 49-67% more expensive now.
Experts admit that labor immigration and whatever the so called Gastarbeiters earn abroad have a profound effect on real estate prices. One hundred square meters of land in Osh, the southern capital of Kyrgyzstan, costs over $3,000 now precisely because of labor immigrants' high income (high by local standards, that is).ÿReturning from Russia, they invest their earnings in real estate and land, the only profitable assets available.

The Uzbek state meanwhile has all but curtailed construction programs, the fact that couldn't help having its effect on real estate prices. Construction of four multistory apartment houses was planned in Andijan once. Construction of apartment houses in Asak and Khanabad was planned as well. As a matter of fact, construction never began because prices of construction materials went up, taking real estate prices with them.

"Common concrete costs 280 sums a kilogram now [$1 = 1,300 sums]," engineer Abduazim Pulatov said. "I'm not even talking of other construction materials, say, fittings brought from Russia and other countries. Or macadam, timber, or whatever... Who is going to buy apartments at prices like that?"

Sources in Andijan say that a multistory apartment house is nearly ready in the northern part of the city, but completion of its construction is going to take time.

No land is parceled out for private construction in Andijan anymore, and that too has its effect. One hundred square meters of land costs more than $1,500 nowadays.

Density of population is another factor to be taken into account. It is common knowledge that density of population in Andijan is one of the highest throughout the Commonwealth: 531 man per square kilometer. It does not facilitate reduction of prices either and keeps the demand well beyond the supply.