Uzbekistan Housing Prices Decline 4.8 Percent as Mortgage Debt Burden Drops

Tashkent, Uzbekistan (UzDaily.uz) — Market prices for housing in Uzbekistan decreased by 4.8% in annual terms at the end of 2025, returning within the standard deviation of the calculated fundamental value, according to the financial stability review published by the Central Bank.

In US dollar terms, housing prices increased by 1.5% due to the strengthening of the soum against the US dollar.

The Central Bank estimates the fundamental value of housing using four models, including a Bayesian state-space model and quantile regression.

The regulator attributed the return of market prices to this range to an increase in supply, including from new construction, and a price correction amid rising household incomes and easing mortgage terms.

Buyer behavior is also shifting. Market participants are moving away from betting on asset value growth toward cautious investments focused on stable rental income, the Central Bank stated.

Rental rates rose by approximately 3% over the year, and the ratio of housing price growth to rental growth fell below one.

The debt burden of borrowers decreased significantly. The average debt service-to-income ratio for mortgage recipients, factoring in all their obligations, stood at 49%, contracting by 22 percentage points over the year. For auto loans, the average debt service-to-income ratio fell from 60% to 37%. The share of loans issued to borrowers with a debt service-to-income ratio of no higher than 40% grew from 58% to 74% of the total volume of disbursements.

The regulator links this to the tightening of macroprudential requirements. Direct loan-to-value limits have been in effect since 24 July 2025, establishing a maximum cap of 85% for mortgages. The introduction of these limits improved the collateral backing of mortgage and auto loans, the review noted.

The average debt service-to-income ratio for all individual bank borrowers, including obligations outside the banking sector, declined from 38% to 37%. Against this background, the risk of bank losses on the retail portfolio decreased, the Central Bank concluded.