The pandemic has had a significant impact on the world real estate and car markets, all countries of the world have felt its consequences, and Uzbekistan is no exception.
Economists are confident that changes in demand in the real estate and auto markets are one of the main indicators of economic recovery, since the demand for durable goods best reflects the consumer sentiment of the population.
Experts from the Center for Economic Research and Reforms (CEIR) analyzed the impact of the coronavirus pandemic on the real estate and car markets.
Real estate market
Before the introduction of quarantine restrictions related to the spread of coronavirus infection, the demand in the real estate market in the republic increased monthly by an average of 6-7%. Sales in real estate markets in Tashkent and Tashkent region account for 40-45% of the total market.
Starting from April, a lockdown was introduced throughout the country, which led to a decrease in demand for real estate by 87.1% (by 94.2% in Tashkent and 89.8% in Tashkent region) compared to the same period in 2019. In May-June, the number of completed contracts for the purchase and sale of real estate in the country jumped by 25.9% and 135.2%, respectively. In a short period, the significant increase in sales is explained by the gradual easing of quarantine measures since May, on the one hand, and the simplification of the permanent registration procedure, on the other.
It should be noted that with the adoption of the Decree of the President of the Republic of Uzbekistan dated April 22, 2020 No. PF-5984 “On measures to reform the procedure for permanent registration and registration at the place of residence” in May, an increase in the number of concluded real estate purchase and sale agreements compared to the corresponding period of 2019 reached 148.7% in the city of Tashkent and 26.5% in the Tashkent region, in June – 257.5% and 190.7%. Interestingly, in the same period, the growth in real estate sales practically did not affect the prices of houses in the city of Tashkent and the Tashkent region. This is mainly due to the transfer to the real owners of houses previously registered to other persons.
By September 2020, demand in the property market has returned to a long-term trend. In particular, in September, the number of real estate purchases and sales increased by 24.2% compared to the previous month (by 41.7% compared to the same period in 2019), in October – by 1.7% (by 24.8 %), in November – by -0.5% (by 22.9%) and in December – by 20.9% (by -17.1%).
Car market
Usually, the monthly growth of car sales in the primary and secondary markets in the republic is on average 2-3%. As a result of the introduction of strict quarantine measures from mid-March 2020, the number of registered and re-registered cars in March decreased by 17.3% compared to the same period in 2019 (by 34.6% compared to the previous month), and in April – by 73. 8% (by 63.1%) (Fig. 2).
Since May, the situation in the car market has begun to recover again. In particular, in June, car sales increased by 14.8% compared to the same period in 2019. However, as a result of the re-introduction of quarantine measures from 10 July to 15 August, activity in the car market in July slowed down somewhat compared to May-June. In particular, the number of registered cars sold this month decreased by 20.2% compared to July 2019. However, in August, car sales grew by 3.8% over the same period in 2019 (54.3% over the previous month).
The demand in the car market in September-October also continued to grow. In September, sales were up 0.5% month-on-month (up 29.5% compared to September 2019). The growth in October was 2% compared to September (19.2% compared to October 2019). In November-December, this indicator slightly decreased (by 1.7% and 1.9%, respectively) compared to the previous month. However, compared to the corresponding period of 2019, sales increased by 9% in November and 10% in December.
Overall, in 2020, car sales were down 2.5% compared to 2019. This is due to the sharp drop in car sales in March, April and July.
Nevertheless, by August 2020, the situation on the real estate market and the car market will return to its long-term trend, which indicates a recovery in population demand.
Khalilullokh Khamidov, Chief Researcher of CERR
