BAKU, Azerbaijan, May 17. Uzbekistan has significantly accelerated its housing construction volumes in recent years while fundamentally restructuring its mortgage market to expand public access to affordable housing and build a resilient financial ecosystem, Ilkhom Norkulov, First Deputy Minister of Economy and Finance of the Republic of Uzbekistan, said, Trend reports.
He made the remark during a Business Assembly session dedicated to Public-Private Partnerships (PPP) held within the framework of the 13th session of the World Urban Forum (WUF13) in Baku.
According to the deputy minister, following systemic structural reforms launched in 2017, annual residential construction outputs in Uzbekistan skyrocketed more than fivefold—surging from an average of 15,000–20,000 apartments per year to over 100,000 apartments last year. For the current year, the government projects the construction of more than 140,000 housing units.
However, Norkulov noted that despite this aggressive expansion, construction paces are still working to catch up with rapid demographic growth. With approximately 1 million births annually and around 270,000 new families forming each year, the country faces a sustained, long-term demand for residential real estate.
The deputy minister emphasized that engineering an efficient, sustainable mortgage market remains a primary macroeconomic challenge for developing nations. While Uzbekistan successfully extended maturity terms for mortgage loans from 10 to 20 years to ease the monthly financial burden on borrowers, further structural reforms remain critical.
Previously, the country's housing finance system relied heavily on centralized administrative mechanisms, where the state directly allocated targeted funds to commercial banks, often causing market distortions.
"In the course of our ongoing reforms, Uzbekistan has successfully transitioned to a market-driven model with the active participation of international financial institutions and commercial banking entities," Norkulov explained.
"Under this new framework, the state provides commercial banks with long-term liquidity at a rate closely aligned with the Central Bank's key policy rate. Banks then add their own commercial margin, establishing a true market-based mortgage rate. To ensure affordability, we have also introduced down-payment subsidies and targeted support mechanisms for lower-income households," he added.
Norkulov highlighted that the state currently injects approximately $1 billion annually into the banking sector to shore up mortgage lending liquidity. Notably, private banking resources now account for about 50 percent of the total mortgage market volume.
"These comprehensive reforms have fostered a highly competitive environment among construction firms, while granting citizens the freedom to select housing across various regions of the country using a balanced mix of state subsidies and market-rate mortgage instruments," the deputy minister concluded.
