The mortgage loan market in Uzbekistan is experiencing a contraction, according to a recent analysis by the Central Bank. From January to June 2024, a total of UZS 6.88 trillion ($543.5mn) in mortgage loans were disbursed, marking a decrease of UZS 124.5bn ($9.8mn) or 1.77% compared to the same period last year, which saw UZS 7 trillion ($553mn) allocated.
The number of mortgage recipients also declined, dropping from 31,699 to 26,201. Interestingly, the average loan amount rose from UZS 221 million ($17,461) to UZS 262.7 million ($20,756), reflecting an increase of 18.9%.
Banks have been allocating more mortgage loans than their available funds, with disbursements increasing from UZS 2.03 trillion ($160.4mn) to UZS 2.36 trillion ($186.5mn). However, this upward trend was counterbalanced by reductions in allocations under the state program (from UZS 3.89 trillion ($307mn) to 3.67 trillion ($289.9mn)) and company funds used for refinancing mortgage loans (from UZS 1.09 trillion ($86.1mn) to UZS 847.1bn ($66.9mn)).
Under the state program, the mortgage interest rate remained unchanged at 17.9%. Meanwhile, banks raised their loan rates from 24.3% to 25.1%, impacting affordability for potential borrowers.
There has been a decline in mortgage uptake among middle-aged individuals (31-50 years old), the elderly (over 50 years old), and women, whose share decreased slightly from 36% to 35%.
In terms of loan purposes, the volume of mortgages for new housing purchases decreased marginally from UZS 3.99 trillion ($315.3mn) to UZS 3.87 trillion ($305.8mn), while loans for second-class housing saw a slight increase to UZS 2.7 billion ($213,330).
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