Tashkent, Uzbekistan (UzDaily.com) -- High activity in the real estate market continued in the second quarter of 2022. However, after a significant increase in prices in the previous period, there was a correction in the cost of housing and, as a result, there was a significant slowdown in the growth rate of real estate prices. This was reported by the press service of the Central Bank of Uzbekistan.

The number of transactions for the purchase and sale of real estate

In Q2, 81.9 thousand transactions were concluded, which is 6.2% more than in the same period of last year. In all regions, with the exception of Tashkent region (a slight decline of -2.8%), the number of real estate transactions increased. The largest increase in completed sales contracts was recorded in Khorezm (27.8%), Navoi (17%), Jizzakh (16.8%) regions and the Republic of Karakalpakstan (17.2%).

Stable volume of supply in the primary and secondary markets, stable activity on the part of buyers, most likely, served as drivers for an increase in the number of transactions.

As a proxy indicator of the volume of supply in the real estate market, the amount of data (number of ads) extracted from open sources using web scraping technology is used.

The Real Estate Demand Index is based on the number of requests for certain keywords related to the housing market and entered by Internet users in Uzbekistan into the Google search engine. The algorithms of the Google Trends search engine assign the number 100 to the maximum number of queries in the selected period. All other queries and chart values are determined as a percentage of the maximum. Each keyword is weighted based on popularity level and an aggregate real estate demand index is compiled.

Secondary real estate market

After a noticeable increase in the cost of housing in the secondary market in the 1st quarter (the soum index - 10%, the dollar index - 4.7%), following the results of the 2nd quarter, the price growth slowed down and amounted to 2%. The dollar index, on the contrary, increased to 6.2%. The difference in the two indices is explained by the strengthening of the soum against the dollar in the current quarter.

A fairly high level of real estate prices and the likely achievement of a certain potential (threshold) for the growth of average prices may have served as one of the reasons for the slowdown in housing prices.

Primary real estate market

A similar situation is observed in the primary market. Prices in the II quarter increased by 2.4%. Considering the monthly dynamics, it should be noted that the main growth occurred in April - 2.3%. In May-June, prices for new housing remained virtually unchanged.

It is likely that the slowdown in price growth also occurred against the background of the stabilization of the national currency.

Rent

The index of activity in the rental housing market increased in the first quarter, which is mainly due to the seasonal factor. At the same time, requests from tenants who form this index in the analyzed period mainly include requests for short-term rentals (due to the beginning of the summer season), while the rental housing price index is determined by long-term rental announcements.

In addition, the increased demand for rental housing in Q2 may be associated with a significant influx of tourists, mainly from the CIS countries (in particular, from Russia, Belarus).

Rental prices in May-June in soums remained stable. In May, the cost per square meter of rented residential property did not change compared to the previous month, and in June it increased by 0.5% (soum index).

The dollar index rose by 1.7% in May and by 2.1% in June.