Tashkent’s real estate no longer a hot investment, data shows

Returns on residential real estate investments in Tashkent have plummeted over the past year, falling more than four times, according to a report from the Institute for Macroeconomic and Regional Studies (IMRS).

Analysts at the institute calculated total returns by combining rental income with capital gains from property appreciation. In April 2024, the overall return stood at 27.8%, but it has since dropped sharply to just 6.2%.

Rental yield alone decreased from 10.9% to 8.5% over the past year, measured as a share of the average property value. At the same time, the average price per square meter in the capital fell by 2.4%.

Despite the overall downturn, some districts and segments maintained relatively high performance. For example, the total return on one-bedroom apartments in the Shaykhontohur district reached 25%, although this marked a significant drop from 41.4% a year ago.

Among two-, three-, and four-bedroom apartments, the Yakkasaray district showed the highest returns — 16.2%, 16.8%, and 15.6% respectively. Notably, the return on two-bedroom apartments in this district slightly increased compared to spring 2024, when it was 12.1%.

The most significant decline was observed in two-bedroom apartments in the Uchtepa district, where returns fell from 27% to -2% — meaning rental income was completely offset by a fall in property prices. Similarly, one-bedroom apartments in the Mirabad district saw returns crash from 24.7% to just 0.3%.

Property prices in Uchtepa dropped 7.4% over the year. Prices also fell in Yunusabad (down 4.4%) and Almazar (down 4.2%). Conversely, prices increased by 6% in both Shaykhontohur and Yakkasaray districts.

In terms of rental yield alone, the highest-performing areas were Mirabad (9.2%) and Shaykhontohur (8.9%), though both figures declined from 11.2% and 12.6%, respectively, a year earlier. One-bedroom apartments proved to be the most profitable segment, with an average rental yield of 8.5%, while four-bedroom units brought in just 3.3%.

Experts noted that the current return on housing is approaching the average interest rate for foreign currency deposits, which stands at 5.1%. For comparison, the rate for deposits in UZS was 22% at the end of April.

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