Uzbek Ministry Sees Housing Price Rise From Escrow Accounts

Tashkent, Uzbekistan (UzDaily.uz) — The Ministry of Justice of Uzbekistan has acknowledged a potential increase in housing costs following the introduction of an escrow account system, while emphasizing that the new mechanism is designed to protect homebuyers’ funds from risks associated with troubled construction projects.

Jamshid Mirzaev, head of the Ministry of Justice’s Economic Legislation Department, made the statement during a meeting of the parliamentary faction of the People's Democratic Party of Uzbekistan.

Responding to a question from MP Anvarkhon Temirov regarding the potential impact of financing construction through authorized banks on housing production costs, Mirzaev said the issue was studied by four research organizations. Their findings concluded that an increase in construction costs is indeed likely.

According to the Ministry of Justice representative, developers currently use shared-equity homebuyers' funds directly, essentially receiving interest-free financing. After the introduction of escrow accounts, buyers’ money will be frozen in banks until developers fulfill their established obligations. To finance construction, developers will need to secure bank loans that require interest payments.

"Yes, housing prices will rise in the future, but if citizens do not receive their apartments, they will easily be able to go to the bank and retrieve their money," Mirzaev said.

Protecting citizens' funds was cited as the main reason for introducing the escrow mechanism. Under the proposal, all payments from buyers, including mortgage loans and subsidies, will be deposited into special accounts at authorized banks. Developers will be able to access these funds only after fulfilling established conditions.

On 11 July, the Legislative Chamber’s Committee on Entrepreneurship Issues preliminarily reviewed a draft law on shared-equity construction. The document aims to regulate relations between developers and homebuyers and strengthen protection for housing buyers.

The need for these changes is driven in part by the growing scale of shared-equity construction and the rising number of troubled projects. Data presented during discussions on urbanization and urban planning reforms showed that the volume of apartment building construction using homebuyers’ funds increased 2.5 times in recent years, exceeding 11 million square meters in 2025.

At the same time, the number of violations increased. In 2025 alone, problems with construction project implementation affected nearly 3,000 citizens, causing damages totaling 668 billion soums.

In addition to escrow accounts, the draft law provides for the creation of a unified digital platform called Uy-joy. The platform is intended to host information on developers, permit documentation, construction projects, work progress, escrow accounts, and shared-equity participation agreements.

Authorities also intend to establish a unified digital system to monitor construction projects using unique identifiers and digital facility passports. The system is designed to enable tracking throughout the lifecycle of construction projects.