Tashkent’s real estate profitability drops significantly

In February 2024, the average profitability from investing in multi-story residential buildings in Tashkent was 32.4%. By October, this figure had fallen to 12.2%, varying significantly based on location and the number of rooms in the property:

• One-room apartments: From 25.7% to 2.3% in Mirzo Ulugbek District and 50% to 17% in Shaykhontohur District.
• Two-room apartments: From 19.4% to 7.4% in Sergeli and 59% to 17.2% in Shaykhontohur.
• Three-room apartments: From 33.7% to 3.2% in Bektemir and 48.7% to 13.7% in Yunusabad.
• Four-room apartments: From 37.9% to 2% in Bektemir and 39.8% to 17% in Yunusabad.

The profitability was calculated based on the annual income generated from rental yields and changes in property prices.

In Shaykhontohur District, the profitability from property price growth dropped from 35.8% in February to 5.5% in October. Similarly, Mirabad and Yakkasaray Districts saw sharp declines in profitability from 23.2% to 1.9% and 16.1% to 3.5%, respectively.

In areas like Mirzo Ulugbek and Uchtepa, where property prices stagnated or slightly declined, the average profitability from price changes was negative in October, at -2.6% and -2.4%.

Rental yields also exhibited reduced growth in October. Annual rental income profitability was:

• Shaykhontohur District: 10% (down from 11.6% in February)
• Mirabad District: 9.8% (down from 10.4%)
• Yakkasaray District: 9.5% (down from 10.5%)

Districts with lower rental rates, such as Sergeli, Uchtepa, Chilanzar, and Olmazor, showed marginally slower rental income growth, ranging between 9.1% and 9.7%.

One- and two-room apartments remain the most attractive investments, despite declining profitability. In February, their average profitability was 35.6% and 30.8%, respectively. By October, these figures had dropped to 16.7% and 12.2%. Larger apartments (three- and four-room) also experienced significant declines, falling to 10.1% and 9.9% from 33% and 30.3%, respectively.