Tashkent, Uzbekistan (UzDaily.com) -- Experts from the Institute for Forecasting and Macroeconomic Research (IPMI) analyzed rental prices in multi-storey buildings in Tashkent city districts.

In the current era of high rates of urbanization, the issue of the cost of renting apartments is becoming increasingly relevant. According to Statista, the proportion of families renting a home in Switzerland is 68%, in Germany - 64%. This figure is 14% in China and 11% in Russia.

Currently, developed countries protect the rights of tenants in order to improve the living standards of the population, and ensure that rental rates do not change during the term of the contract. For example, in the UK it is forbidden to receive any commission other than fixed payments related to rent, and in the US people who buy a house with a mortgage have an income tax relief.

According to The Economist, the higher the share of homeowners, the more volatile prices in the housing market. For example, the proportion of homeowners in Switzerland is 3%, in the UK - about 60%. Between 1970 and 2019, home prices in Switzerland rose by 70% and in the UK by 346%.

In addition, macroeconomic indicators are also affected by the increase in rental housing occupancy. For example, as the US homeownership rate rose, so did the unemployment rate. On the one hand, this is due to the fact that people lose their desire to move to another place, and on the other hand, it is more expensive to move to where there is work.

According to the results of the analysis, the average cost of renting in multi-storey buildings in Tashkent is US$339. In the housing rental market, the lowest price was recorded in Sergeli and Almazar districts, and the highest - in Mirabad and Yakkasaray districts.

The profitability of the rental business (rental yield - income received per year from renting a house) is 10% for the city of Tashkent. For comparison, this figure is 6% in Romania, 5% in Poland, 3% in Germany and 2% in Turkey. At present, the income from renting real estate in Tashkent is three times higher than the average income of a bank foreign currency deposit (3.4%). This indicates that today it is more profitable to spend savings on real estate and sell it in the city of Tashkent than to store it as a pledge in foreign currency.

The price/rent ratio for Tashkent is 10 years. This figure is 52 years in Turkey, 34 years in Germany, 18 years in Poland and 17 years in Romania. So, owning a house in Tashkent is cheaper than renting. This naturally increases people’s desire to own their own home rather than live in foreclosure.

The average price of an apartment in the center of Tashkent is 50 times higher than the ratio of GDP per capita. This figure is 158 times in Ukraine, 87 times in Russia, 66 times in the UK, 20 times in Switzerland, 17 times in Germany and 5 times in Luxembourg. It shows whether people’s purchasing power is low or high in general.

Summing up, we can say that the apartment rental market in Tashkent is at the initial stage of formation.

Taking into account the acceleration of the urbanization process, for the development of the rental market, it is recommended:

- further strengthening of the legal framework for protecting the interests and rights of tenants;

- control abrupt changes in rental prices (based on German experience), for example, establish by law that the rental price cannot be increased by more than 10% of the average price in the city without explaining the reasons or relevant prerequisites;

- widespread introduction of information technologies that directly connect the owner of the house and the potential tenant in order to prevent the problem of information asymmetry in the market.