TASHKENT, Uzbekistan, June 2. The gap between market and fundamental housing prices in Uzbekistan is narrowing.
The data obtained by Trend from the Central Bank (CBK) indicates that despite persistently high market prices, a decline in demand alongside increased supply has helped ease the imbalance in the real estate sector. Throughout 2024, housing market prices have stabilized, while fundamental values have continued to rise moderately, contributing to a gradual price correction.
Fundamental housing values were assessed using models including the State Space Model (SSM), Bayesian State Space Model (BSSM), and Quantile Regression. On average, market prices exceeded fundamental values by 17 percent in 2024. Quantile regression proved particularly effective in identifying periods of overvaluation (above the 80th percentile) and undervaluation (below the 20th percentile), although model accuracy was challenged by outliers and non-normal error distributions.
Stricter mortgage lending conditions have made home purchases more selective. Rising interest rates and shorter loan terms have increased monthly mortgage servicing costs. As a result, despite a 17 percent rise in average nominal wages during 2024, average mortgage payments surged by 44 percent, leading to a 27 percentage-point drop in the housing affordability index.
