11:21 / 22.04.2020
How will quarantine hit Uzbekistan’s real estate market?

How will restrictive measures affect the real estate market, what will happen to transactions in isolation and how will quarantine affect the cost of housing?

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After the quarantine ends, it is highly likely that owners will be forced to lower prices amid the economic crisis.

For the next month, prices will remain unchanged, and raising prices now is pointless. The average price per square meter will decrease slightly, and some owners may decide to suspend sales.

The quarantine does not fundamentally affect the value of the residential real estate. Rather, it pauses all processes.

It is important to observe this pause now, this is a temporary phenomenon. It alone does not reduce the cost of apartments. But in the long term, the price of apartments, quite possibly, will be adversely affected by cheaper oil, weakening of soum, worsening economic conditions and lower incomes.

Transactions are being held at the conclusion stage, not everyone is abandoning their plans. Especially since there is no 100% understanding of what will happen to prices afterwards. There are refusals from transactions, but most often in the business class segment and above. If quarantine measures last longer, then the decline in value will begin.

In connection with the quarantine, part of the owners whose need for sale is not urgent suspended the sale. They can enter the market after the quarantine is completed, but it’s too early to talk about it: firstly, the terms of the quarantine are completely unclear. Secondly, the US dollar has gone up again, this may affect the owners’ decisions.

According to observations, half of the calls are coming from sellers, the other half from buyers, and for the most part, they believe that now (that is, as soon as the quarantine is lifted) it’s time to sell or buy an apartment. Amid quarantine, the number of online counseling services has grown markedly.

People are concerned about the growth of the US dollar, as well as a complete disruption of the economy in the world. The consequences of these events will be reflected in the market in the form of finding an equilibrium price between the seller and the buyer. However, it is worth exhibiting your objects, negotiating with customers. This is the only way to realize the pent-up demand that will accumulate in the coming months.  

You may notice that the secondary market has always been more sensitive to the situation in the oil and foreign exchange markets than the market for new buildings. Moreover, during currency jumps we always feel an increase in the number of transactions. How exactly the primary real estate market reacted this time, we can see only after the end of the self-isolation regime, then more reliable statistics will appear. 

Due to the considerable growth of the US dollar and the euro, many are asking questions, how will the housing market react, what will happen to real estate prices? Nobody will give an absolutely accurate forecast, but on the example of previous crises, one can state the following: if in the long run the incomes of the population fall, and at the same time there will be a round of price increases for all imported goods, this can lead to long-term stagnation and lower prices. This period can last a long time, and the market will look for a new bottom.

Against the backdrop of the latest news, real estate buyers are divided into two conditional camps in a ratio of 50/50. The first is most prone to general sentiments: self-isolation, a wait-and-see attitude, transfer of large transactions to a later period. The other part, after the rapid fall of the national currency, on the contrary, turns to the sales department in order to maintain the accumulation. This is especially true for investment products, such as commercial premises, as well as for business and premium real estate.