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STAGES AND PROSPECTS OF DEVELOPMENT OF THE MORTGAGE
MARKET OF UZBEKISTAN
Bekchanov Islombek Rustamovich
Financial Academy of the Bank of the Republic of Uzbekistan
master of business administration – MBA general
https://doi.org/10.5281/zenodo.15377807
In recent years, the housing issue in Uzbekistan has been gradually
developing, becoming one of the top priorities of state policy. In particular, great
attention is paid to meeting the demand and needs of the population for housing
through the formation and development of the mortgage market. In Uzbekistan,
especially in the Khorezm region, certain successes have been achieved in this
process, but there are also issues awaiting resolution. A large number of
documents have been adopted for this. In particular, the Decree of the President
of the Republic of Uzbekistan No. PF-5886 dated November 28, 2019 “On
additional measures to improve mortgage lending mechanisms” , Resolution of
the Cabinet of Ministers No. 182 of March 25, 2020 “On approval of the
Regulation on the procedure for paying subsidies to citizens for the purchase of
housing” , Decrees of the President of the Republic of Uzbekistan No. PF-33
dated December 9, 2021 “On additional measures to provide the population with
housing through mortgage loans based on market principles” and many other
documents have been adopted.
In order to ensure the quality of the implementation of the adopted
documents, it is necessary to increase the responsibility and accountability of
the heads of state bodies.
Based on the Presidential Decrees, annual programs for the development of
the mortgage market are developed. Based on these programs, new approaches
are taken to meet the housing needs and demands of the population.
In accordance with the Decree of the President of the Republic of
Uzbekistan No. PF-26 dated February 21 of this year “On additional measures
for the further development of the housing and mortgage market” The main
goal is to build 135 thousand apartment buildings by 2025.
It is important to expand the scale of modern housing construction and the
types of mortgage products in our country, and reforms in this area will serve to
further improve the living standards of the population, develop urbanization
processes, and ultimately grow the economy.
In particular, over the past 5 years, multi-apartment housing with a total
area of 21.7 million m2 has been built, mortgage loans worth 67 trillion soums
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have been allocated to assist the population in purchasing housing, and 44
trillion soums have been allocated from the state budget for these purposes.
More than 64 thousand citizens with low incomes have been paid more
than 3.5 trillion soums in subsidies.
At the same time, the fact that the population has been increasing by about
800 thousand people and the number of new families by 300 thousand per year
in recent years requires the intensification of work to meet the demand for
housing.
Also, instead of 2-3-story houses, which make up about 40 percent of the
multi-apartment housing stock in the republic, there are sufficient opportunities
to build modern housing with social facilities and green spaces based on the
principle of vertical growth.
Accordingly, the goal is to expand the scale of housing construction in the
regions in accordance with the principles of urbanization and renovation,
accelerate the construction of "New Uzbekistan" estates, increase the role of the
capital market in providing mortgages with financial resources, and continue to
refinance mortgage loans issued by commercial banks.
In accordance with the program for providing housing to the population
through mortgage loans based on market principles in 2025, it is planned to
build 135 thousand apartment houses in our republic with an area of 8.1 million
m2, increase the number of subsidies to cover part of the initial installments and
interest payments on mortgage loans by 1.5 times and allocate 2.5 trillion soums
from the State Budget for these purposes, allocate mortgage loans in the amount
of 20.9 trillion soums to provide the housing and mortgage market with financial
resources, and allocate 700 billion soums from the State Budget and 3.0 trillion
soums from the own funds of commercial banks to provide working capital to
construction organizations participating in the construction of multi-apartment
housing in the "New Uzbekistan" and other areas.
It was also determined that in 2025, 2.5 trillion soums of subsidy funds will
be allocated from the republican budget to 30 thousand families to cover part of
the initial installment and interest payments on mortgage loans for the purchase
of apartments in multi-storey buildings.
The decree stipulated that, starting from March 1, 2025, new territories for
the “New Uzbekistan” estates will be selected in accordance with the principles
of urbanization, taking into account the following criteria:
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- the estate is located in the district (city) center or in the area close to it (up
to 2 kilometers) and there is a demand for housing among the population living
in this area;
- the estate is provided with engineering, communication and transport
infrastructure or is close to existing infrastructure;
- at least 70 thousand people live in the area where the estate is to be
created;
- the total area of the total number of apartments in the estate is at least
100 thousand m2 and the construction of houses is planned to be at least 7
floors;
- at least 2 percent of the costs of building multi-apartment housing are
directed to the creation of green areas around the housing;
- The Chairman of the Council of Ministers of the Republic of
Karakalpakstan, the khokims of the regions and the city of Tashkent are
personally responsible for ensuring that the territories selected for the creation
of the “New Uzbekistan” estates comply with the criteria provided for in this
paragraph.
In total, 4,920 multi-storey residential buildings with 221.9 thousand
apartments were built in our republic over the past 3 years. In particular, 1,433
multi-storey residential buildings with 56.1 thousand apartments were built in
2022, 1,443 multi-storey residential buildings with 65.5 thousand apartments in
2023, and 2,044 multi-storey residential buildings with 100.3 thousand
apartments in 2024. Of these, 76 multi-storey residential buildings with 3,676
apartments in 2022, 333 multi-storey residential buildings with 9,723
apartments in 2023, and 394 multi-storey residential buildings with 14,854
apartments in 2024 were built and commissioned in the "New Uzbekistan"
estates.
At the same time, according to the Decree, in 2025, it is planned to build
543 houses with 28,219 apartments in the “New Uzbekistan” estates. In
particular, it is planned to build 286 houses with 15,374 apartments, which are
transferred from year to year, and 257 new multi-storey houses with 12,845
apartments.
The Decree provides that, starting from May 1, 2025, within the framework
of the construction of the “New Uzbekistan” estates;
a) only legal entities that pay value added tax are allowed to participate in
auctions for the lease of land plots for the construction of multi-apartment
housing;
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b) the auction offer for the lease of land plots for the construction of multi-
apartment housing shall set a period of 15 days for the preparation of
preliminary design documentation, 2 months for the implementation of design
work and 3 months for the start of construction work, and shall also indicate the
terms for the completion of construction and acceptance of the facility for use. In
this case:
the land plots shall be sold within the period for the completion and
acceptance of multi-apartment housing;
the land plot shall be withdrawn from the winner of the auction sale who
has not fulfilled the requirements of the offer in accordance with the procedure
established in Appendix 4 to the Decree of the President of the Republic of
Uzbekistan No. PF-135 dated September 6, 2024 and shall be put up for
repeated auction sale;
c) legal entities that lease a land plot for the construction of multi-
apartment housing at auction sales shall be exempted from paying land tax on
this land plot for 12 months from the date of lease.
In this case, if the multi-apartment housing is not built and put into
operation within the specified period, the land tax for the period of using the
privilege will be collected in the amount of 2 times;
g) at least 10 percent of the total area of land plots intended for the
construction of commercial buildings in the “New Uzbekistan” estates will be put
up for auction as a single lot together with the land plots allocated for the
construction of housing.
The Ministry of Economy and Finance and the Central Bank have
determined that, starting from March 1, 2025, commercial banks will provide
loans to construction organizations carrying out the construction of multi-
apartment housing in the “New Uzbekistan” estates to replenish their working
capital at a rate no higher than 2 percentage points above the Central Bank’s
base rate for a period of 24 months with a grace period of 12 months, and these
loans will be gradually refinanced at the expense of funds allocated by the
Ministry of Economy and Finance at the Central Bank’s base rate for a period of
24 months with a grace period of 12 months.
In general, continuing state programs implemented in our country to meet
the housing needs and demands of the population, especially low-income
families, and accelerating the construction of multi-storey housing based on
green principles remain important elements of regulating the mortgage market.
