Uzbekistan housing market sees mortgage growth in 2025

Tashkent, Uzbekistan (UzDaily.com) — In 2025, Uzbekistan’s housing market developed amid steady growth in household incomes and demand for real estate, a significant increase in mortgage lending volumes, and a high level of state support on the supply side, according to an analytical study by the Central Bank of Uzbekistan.

To financially support housing demand, commercial banks issued mortgage loans worth 21.2 trillion soums in 2025, which is 4.1 trillion soums or 24% more compared to 2024.

During the reporting period, the share of loans allocated to the purchase of primary market housing increased by 11 percentage points compared to 2024, reaching 72%, while a downward trend was observed in the secondary housing market.

The growth in mortgage lending in the primary housing segment was mainly ensured through funds from the Ministry of Economy and Finance (an increase of 3,184.6 billion soums), as well as loans issued under the conditions of the Mortgage Refinancing Company of Uzbekistan (MRCU), totaling 667 billion soums.

As a result, the outstanding mortgage portfolio as of January 1 increased by 11.7 trillion soums (17.3%) compared to the beginning of 2025, reaching 79.4 trillion soums.

In the structure of the total credit portfolio of commercial banks (604 trillion soums), the share of mortgage loans amounted to 13.1%.

Of the total 390 trillion soums in loans issued by commercial banks in 2025, 156.9 trillion soums (40%) were directed to individuals.

Within lending to individuals, there was a significant increase in the share of credit cards (up 3 percentage points year-on-year), microloans (up 2 percentage points), and microcredits (up 1 percentage point), while the share of mortgage loans decreased by 3 percentage points, despite their absolute growth of 4.1 trillion soums compared to 2024.

This downward trend is explained by the fact that total lending to individuals in the reporting year grew significantly faster (by 51%) than mortgage lending (by 24%).

As of January 1, 73% of the outstanding mortgage portfolio was financed through centralized funds, while 8% came from MRCU resources, which compared to the beginning of 2021 represents an increase of 4 and 7.8 percentage points respectively, while the share of loans financed from banks’ own resources declined by 12 percentage points.

This decline is linked to the fact that mortgage loans issued through centralized funds and MRCU are provided at lower market rates, generating higher demand compared to loans financed from banks’ own resources.

The largest share of mortgage loans in the banking system was recorded at Ipoteka Bank and the Business Development Bank, while relatively low indicators were observed at Microcreditbank and Asaka Bank.

According to the analysis, 64% of mortgage loans issued last year were financed from centralized funds, 25% from commercial banks’ own funds, and 11% under MRCU conditions.

Setting the annual interest rate on mortgages issued from centralized funds at up to 18% (with 4% of interest expenses covered by the state for citizens with subsidy notifications during the first five years) further stimulated demand for such loans in the current income and housing market environment.

As a result, 89% of mortgage loans allocated for the purchase of primary market housing were financed through centralized funds, while 40% were granted to citizens holding subsidy notifications.

This, in turn, led to a 10 percentage point decline in the share of mortgages issued from banks’ own funds in total mortgage lending compared to 2024, down to 25%.

In recent years, stable growth has also been observed in mortgage lending provided under the conditions of the Mortgage Refinancing Company of Uzbekistan (MRCU).

Following the introduction of a system of mortgage lending to the population through centralized funds based on Presidential Decree No. PF-5886 dated November 29, 2019, “On additional measures to improve mortgage lending mechanisms in the Republic of Uzbekistan,” the share of mortgages issued by commercial banks from their own funds at market rates increased significantly.

In particular, the average annual interest rate on mortgages issued from banks’ own resources rose from 18.5% in 2020 to 24.8% in 2024; however, in recent years, due to increased competition among commercial banks, average annual rates declined to 23.4% in 2025.

As a result, the weighted average annual mortgage rate across all issued loans stood at 21%, which is 0.1 percentage points lower than in 2024.

By region, the highest share of mortgage lending was recorded in Tashkent city (32%), Andijan region (7%), and Fergana region (7%), while the lowest shares were observed in Syrdarya (2%) and Jizzakh (3%) regions.

In 2025, the structure of all issued mortgage loans saw a decline in the share of loans up to 300 million soums, while loans in the 300–400 million soum range and above 400 million soums increased by 5.3 and 1.6 percentage points respectively.

In addition, the share of mortgages with a maturity of up to 10 years decreased by 4 percentage points to 13%, while the shares of loans with maturities of 10–15 years and 15–20 years increased by 1.1 and 2.9 percentage points respectively.

In recent years, faster growth in average monthly nominal wages and overall household income compared to housing price inflation has positively influenced the trend of citizens participating in mortgage lending with higher down payments.

In particular, the share of borrowers contributing a down payment of more than 50% increased by 7 percentage points to 22%, while the share of participants with a down payment of up to 20% decreased by 18 percentage points to 29%.

Regionally, the highest level of participation with down payments above 50% was observed in Syrdarya (34%), Fergana (29%), Jizzakh (27%), and Bukhara (27%) regions.

In 2025, 20.5 thousand citizens in need of improved housing conditions and holding subsidy notifications received mortgage loans totaling 6.2 trillion soums, and their share in total mortgage lending increased by 5 percentage points compared to 2024, reaching 29%.

In the structure of mortgage loans issued under subsidy notifications (6.2 trillion soums), the largest shares were recorded in Andijan (13%), Samarkand (12%), and Fergana (12%) regions.

At the same time, commercial banks issued 5.4 trillion soums in mortgage loans from their own funds, which is 616 billion soums less compared to 2024.

This decline can be explained by the fact that in the reporting year, compared to 2024, mortgage lending through centralized funds and MRCU increased by 4,675 billion soums and 667.3 billion soums respectively, while loans from centralized resources were primarily directed to the primary housing market.

Of mortgage loans issued from banks’ own funds, 68% (3,654.1 billion soums) were directed to the secondary housing market, while 32% (1,708.8 billion soums) were allocated to the primary market.

The outstanding portfolio of such mortgage loans as of January 1 amounted to 15.5 trillion soums, increasing by 8% compared to January 1, 2025. The largest shares of these loans in the banking system belong to Uzmilliybank (22%), Ipoteka Bank (14%), and Halk Bank (12%).

Mortgage loans issued from commercial banks’ own funds were distributed by maturity as follows: 5.2% up to 5 years, 46.6% for 6–10 years, 18.7% for 11–15 years, and 29.5% for 16–20 years.

The housing price index in Uzbekistan reached its peak in both segments and has since, over the past two years amid growing housing supply, entered a relatively stable phase of price dynamics.

Amid an improving balance between supply and demand in the real estate market, in the fourth quarter of 2025 compared to the third quarter, annual price changes amounted to -1.3% in the primary market and 0.7% in the secondary market.

In addition, due to a significant increase in housing supply in recent years, the housing price index for the full year compared to 2024 decreased by 4.4% in the primary market and 5.9% in the secondary market.

The transition of housing price dynamics to a more stable phase can mainly be attributed to the following fundamental factors.

A significant increase in housing supply has expanded housing choices for the population.

One of the key factors influencing real estate prices is the annual volume of supply.

In the past year, housing supply in Uzbekistan increased by 35,000 units compared to 2024, while the total number of completed apartments reached 135,000. Of this total, 37,200 apartments were completed in Tashkent city (+14,700 compared to 2024), 12,900 in Samarkand region (+1,400), and 10,600 in Fergana region (+2,700).

As a result, as of January 1, 2026, the total housing stock in the republic amounted to 734.4 million square meters, increasing by 4% (30.6 million square meters) compared to January 1, 2025. The highest levels of total housing stock were recorded in Samarkand region (87 million sq. m.), Fergana region (86.4 million sq. m.), and Tashkent city (74.5 million sq. m.).

Consequently, the average housing provision level in the country increased from 15.7 square meters per person in 2017 to 19.2 square meters in the current year.

The analysis shows that the stabilization of housing price growth is directly linked to the increase in the number of newly commissioned apartments compared to 2024, which helped restore a balance between supply and demand.

The expansion of housing supply also had a positive effect on the number of real estate transactions.

In the reporting year, the total number of housing purchase and sale transactions reached 295,400, increasing by 15.2% (38,900 transactions) compared to 2024. Notably, the share of transactions involving mortgage-financed purchases accounted for 23.8%, rising by 0.8 percentage points compared to the previous year.

The highest share of mortgage-based home purchases was recorded in Surkhandarya region (37.8%, up 5.1 percentage points), Navoi region (35.3%, down 0.6 percentage points), and Kashkadarya region (33.3%, up 5.6 percentage points).

In 2025, the share of individual housing in total real estate transactions decreased by 5 percentage points compared to 2024, amounting to 33%.

The highest share of apartment transactions in multi-storey residential buildings was observed in Tashkent city (80%), Navoi region (79%), Bukhara region (78%), and Samarkand region (75%).

A stable cycle of economic growth plays an important role not only in improving the investment climate in the housing market, but also in increasing household purchasing power.

In the past year, 313.9 trillion soums were allocated to construction works nationwide, which is 14.2% more compared to 2024.

In addition, in order to implement Presidential Decree No. PF-26 dated February 2, 2025, commercial banks provided loans totaling 4.4 trillion soums to contracting organizations for the construction of 687 multi-apartment buildings with a total capacity of 43,600 apartments.

Furthermore, 1.3 trillion soums from budget funds were directed to the development of social infrastructure and external utility networks in residential areas under the “New Uzbekistan” program.

In addition, Presidential Decree No. PF-219 dated November 19, 2025 set the goal of doubling annual housing construction volumes by 2040, reaching 421,000 housing units per year.

In the current market conditions, increasing housing construction volumes is one of the key economic prerequisites for ensuring a sustainable balance between supply and demand in the future.

The continuation of structural reforms in the real sector of the economy in the coming years is expected to expand housing supply capacity and further increase household purchasing power.

High demand in Uzbekistan’s housing market in 2025 was driven by the following fundamental socio-economic factors.

Demographic growth continues to ensure a steady increase in housing demand.

As of January 1, the permanent population reached 38.2 million people, increasing by 1.8% (693,500 people) compared to the previous year. The highest population growth rates were recorded in Tashkent city (2.1%), Surkhandarya region (2.2%), and Kashkadarya region (2.1%).

According to analytical estimates by the International Monetary Fund, Uzbekistan’s population is expected to reach 39.7 million by the end of 2027.

One of the key social drivers of aggregate housing demand is the number of newly formed families. Between 2017 and 2025, the number of new families (2,665 thousand) was three times higher than the number of newly built and commissioned apartments over the same period (886 thousand), which will continue to stimulate real housing demand in the future.

Against the backdrop of sustained demographic growth, the ratio of existing housing stock to the number of families stood at 0.73 at the beginning of the year, slightly lower than in 2024.

Notably, amid stable growth in housing supply, a high ratio of commissioned apartments to the number of registered marriages was recorded in the reporting year (coefficient of 0.5).

The housing-to-household ratio remained unchanged compared to 2024, at 1.01 nationwide.

At the regional level, the most stable indicator was observed in Tashkent region, while in Tashkent city, strong growth trends in these ratios have been maintained over the past three years.

Faster growth in demographic indicators and household incomes compared to housing price increases, along with accumulated unmet demand in previous years, are creating an economic and social foundation for maintaining, in the medium term, a situation where aggregate housing demand exceeds supply.

The share of households owning their own homes remains relatively stable.

By the end of 2025, the share of households owning residential property accounted for 98.4% of the total number of households, increasing by 0.5 percentage points compared to 2024.

In the past year, despite the fact that in Tashkent city the housing-to-household ratio stood at 1.11, the share of families owning their own homes reached 92.2%.

At the same time, this indicator in the capital, despite noticeable growth in 2025 compared to 2024, declined by 2.9 percentage points compared to the 2017 level.

These trends indicate that in recent years the rental housing market in Tashkent has been actively developing, while demand for inclusive and affordable rental housing aligned with household income levels has been increasing.

Against the backdrop of rising purchasing power, housing affordability has improved.

In the past year, compared to 2024, growth in average monthly wages (19%) and per capita income (16.6%) outpaced housing price increases, significantly improving household purchasing capacity.

Notably, in all regions of the republic, the ratio of average housing price per square meter to average monthly wages, per capita income, and nominal GRP per capita declined, indicating improved housing affordability.

In 2025, in Tashkent city, the ratio of the average housing price per square meter (14.9 million soums) to average monthly wages (10.7 million soums) decreased from a coefficient of 1.77 in 2024 to 1.38, reflecting a significant improvement in housing affordability.

Based on current economic trends in Uzbekistan, it is expected that in the near future household income growth will outpace housing price growth.

This, in turn, will contribute to maintaining sustained high demand in the real estate market in the coming years.

The active role of the state in providing housing through mortgage lending allows housing demand to be transformed into effective, realized demand.

Presidential Decree of the Republic of Uzbekistan dated November 19, 2025 No. PF-219 “On measures for the sustainable development of the housing and mortgage market in the Republic of Uzbekistan” sets a number of strategic development targets for the sector through 2040. In particular:

— increasing the mortgage loan portfolio for the population more than tenfold, to 56.7 billion US dollars;

— raising housing provision per capita from 18.9 square meters to 23 square meters;

— increasing the mortgage securities portfolio to 4 billion US dollars, along with other important targets and objectives.

The active role of the state as the main reformer in ensuring sustainable development of the housing market will in the future contribute not only to expanding supply and effective demand, but also to further improving the investment climate in the sector.

A stable trajectory of economic development in the country is important both for improving the investment climate in the real estate market and for increasing household solvency.

In 2025, Uzbekistan’s GDP increased by 7.7%, investment in fixed capital grew by 10.5%, and construction output rose by 14.2%.

In the current economic environment, real GDP growth in 2026–2027 is expected to remain in the range of 6.5–7%, with macroeconomic stability preserved in the medium term.

According to analysis by International Monetary Fund experts, as a result of ongoing economic modernization reforms, Uzbekistan’s nominal GDP is projected to reach 2,465 trillion soums by the end of 2027, while GDP per capita is expected to reach 4,957 US dollars.

Notably, in 2025 Uzbekistan’s nominal GDP exceeded the forecast level (1,505 trillion soums) by 23% and reached 1,849.6 trillion soums. GDP per capita increased by 18% compared to 2024 and reached 48.8 million soums.

In the near term, continued structural reforms in the real sector of the economy are expected to support sustained growth in both demand and supply in the housing market.

Under current legislation, the loan-to-value (LTV) ratio for mortgage loans issued from banks’ own funds must not exceed 80%, while for loans refinanced through the Ministry of Economy and Finance it must not exceed 85%.

The LTV indicator is widely used in international practice to mitigate several types of risk:

Credit risk: a lower LTV increases banks’ ability to recover outstanding debt through the sale of collateral in the event of borrower default.

Housing price decline risk: a high LTV increases the risk that, in the event of a sharp drop in property prices, the market value of real estate may fall below the loan value, whereas a lower LTV helps ensure resilience to price fluctuations and reduces the likelihood of systemic imbalances.

Borrower moral hazard risk: stricter regulatory LTV requirements encourage borrowers to contribute a higher down payment, increasing their financial commitment and incentive to repay mortgage loans on time.

Commercial banks generally use the LTV ratio as a regulatory requirement in mortgage issuance, defined as the ratio of loan amount to collateral value. However, when assessing the risk level of the overall mortgage portfolio, using outstanding loan balances allows for a more accurate assessment of the actual current situation.

At the same time, in the overall portfolio structure, the impact of early repayment of mortgage loans and cases of borrowers making payments ahead of schedule becomes more evident when assessing total risk exposure.

As of January 1, 2026, the average LTV ratio of the mortgage portfolio decreased by 2 percentage points compared to the previous period and stood at 61%.

By funding source, the LTV ratio was as follows: 60% for mortgages issued from banks’ own funds (59% in 2024), 59% for loans under MRCU conditions (64% in 2024), and 64% for loans financed through centralized funds (66% in 2024).

Analysis of the loan-to-value (LTV) indicator shows that in the past year, the level of current risks on mortgage loans issued under MRCU conditions significantly decreased.

In international mortgage lending practice, a reduction in the LTV ratio, on the one hand, allows borrowers to obtain additional mortgage credit within the value of existing collateral property, and on the other hand, enables commercial banks to expand the issuance of mortgage-backed securities (Residential Mortgage-Backed Securities).

It should be noted that in Uzbekistan’s mortgage practice, in accordance with current legislation, there is a possibility of reusing real estate as collateral when issuing subsequent mortgage loans for the purchase of apartments in under-construction multi-apartment buildings, as well as for the construction, reconstruction, or renovation of individual housing.

The decline in the average LTV level during the reporting period can be explained by several fundamental factors.

First, citizens’ participation with their own funds in mortgage down payments has increased. In particular, in the past year, the share of borrowers contributing a down payment of more than 50% reached 22% of the total number, significantly higher than in 2024.

Second, the growth of household incomes compared to housing prices has increased borrowers’ tendency to repay mortgage obligations ahead of schedule, in amounts exceeding the established repayment schedule.

In the reporting period, the volume of early mortgage repayments amounted to 9.4 trillion soums, which is 3.2 times higher than planned repayment schedules.

By region, the highest levels of repayment exceeding scheduled payments were recorded in Tashkent city (4.8 times) and Navoi region (3.6 times).

Third, in the past year, the number of fully early repaid mortgage loans amounted to 33,400 (3,983.5 billion soums), significantly higher than in 2024 (23,700 loans or 2,718.1 billion soums).

By regional breakdown, the largest share of fully early repaid mortgage loans was recorded in high-income regions — Tashkent city (23%) and Samarkand region (8%).

Notably, in 2025 the average maturity of issued mortgage loans (17.4 years), as well as the average actual usage period of loans that were fully repaid early (7.2 years), remained at the same level as in 2024.

The increasing motivation for early and accelerated mortgage repayments, amid growing real demand for housing, reduces existing risks and expands opportunities for commercial banks to introduce new mortgage products.

In recent years, amid sustained growth in global housing prices, the influence of real estate values on household income and savings has been steadily increasing.

If previously real estate was considered a secondary product of economic growth or a variable dependent on interest rates, in recent years it has increasingly been viewed globally as a macroeconomic factor shaping price levels, wages, and social sentiment.

As part of the analysis aimed at assessing housing market efficiency, the relationship between housing prices and household incomes, and current rental market conditions, several key indicators widely used in international mortgage practice were examined across selected capitals.

In 2025, the gross rental yield in Tashkent city amounted to 9.3%, increasing from 8.8% in 2024.

The highest values of this indicator were recorded in Astana and Dushanbe, while lower levels were observed in Moscow.

The price-to-rent ratio reflects the efficiency of housing sector reforms and shows how many years of rental income are needed to cover the nominal value of housing.

In the reporting period, this indicator stood at 31.7 in Moscow, 19.3 in Baku, and 18.2 in Minsk, while in Tashkent it was 10.7, improving compared to 2024 (11.4).

Based on these data, several key conclusions can be drawn regarding the rental market in the capital:

— rental income levels are stabilizing relative to housing prices;

— the rental housing market in Tashkent is developing rapidly due to demand-side factors and demonstrates strong potential as a stable income source for investors;

— rental yields, household incomes, aggregate demand, and supply form a fundamental basis for potential future growth in property prices in the capital;

— expansion of the mortgage market and growth in investment demand may lead to an increase in the price-to-rent ratio.

For balanced development of the rental market in Tashkent city, expansion of housing supply and further institutionalization of this segment are of key importance.

In 2025, the ratio of housing prices to annual household income in Moscow stood at 22.2, while in Tashkent it was 7.5, improving compared to 2024 (9.5).

Across selected capitals, the average monthly rent for a one-bedroom apartment in Tashkent amounted to 334 US dollars, which is lower than in several other capitals, including Astana (424 US dollars), Minsk (483 US dollars), and Baku (401 US dollars).

The ratio of rent for a one-bedroom apartment to average monthly wages was most favorable in Minsk (0.6), Moscow (0.6), Baku (0.7), and Tashkent (0.8).

The highest ratios of housing price per square meter to average monthly wages were recorded in Moscow (4.5), Tbilisi (4.5), and Baku (4.5).

The analysis shows that effective reforms in the housing sector depend not only on the pace of economic growth, but also on the depth of individual and institutional approaches in the industry.

Considering the expected increase in housing demand factors in the near future, as well as the concentration of real estate and rental market activity in Tashkent city, several priority directions are identified for advancing housing construction and mortgage reforms to a new stage of development.

Given that the ratio of housing prices to annual income is one of the key final indicators of an inclusive mortgage market, it is necessary to introduce a unified methodology for its calculation across regions, ensure its regular publication, and define its main KPI indicators.

It is also necessary to establish clear criteria for “standard” category housing and gradually increase the volume of mortgage lending financed from budgetary resources for the purchase of such housing.

Considering that the rental housing system is an important intermediate and transitional stage toward homeownership through savings, the formation of an institutional rental market for “standard” housing should become one of the new directions of future reforms.

In 2025, commercial banks provided loans to contracting organizations for the construction of multi-apartment residential buildings with a total capacity of 43,600 apartments, amounting to 4,380 billion soums (compared to 3,053 billion soums in 2024). As of January 1, 2026, the outstanding balance of these loans reached 6,172 billion soums.

Of the total issued loans, 30.3% (1,326.5 billion soums) were allocated to Tashkent city, 16.9% (740.5 billion soums) to Fergana region, and 16.2% (707.4 billion soums) to Surkhandarya region.

Approximately 40% of the loans (1,764 billion soums) were directed to financing the construction of 304 multi-apartment buildings with 16,700 apartments in the “New Uzbekistan” residential areas.

By the end of 2025, the largest shares of outstanding loans issued to contracting organizations were concentrated in Tashkent city (33.6%), Tashkent region (14.1%), and Surkhandarya region (13.8%). By bank, the largest shares were held by Uzsanoatqurilishbank (19.9%), the National Bank (17.6%), and Agrobank (16%).

Analysis of the maturity structure of outstanding loans shows that 2% were issued in 2020–2021, 9% in 2022–2023, and 89% in 2024–2025.

In addition, it is expected that 34% of these credit obligations will be repaid by the end of 2026, 36% in 2027, 19% in 2028, and 11% during 2029–2031, in accordance with contractual repayment schedules.