For today's Tashkent real estate market, land prices represent the most serious challenge. Most market participants live by a false paradigm, mistakenly attributed to Mark Twain: "Buy land – because no one is making it anymore." Everyone dreams of buying an asset that is guaranteed to appreciate, but throughout human history, unfortunately or fortunately, such universal investment instruments have not been created.
In reality, land and real estate prices can fall very significantly. Most often, this is due to global crises, such as the Asian financial crisis of 1997, the global financial crisis of 2008, and armed conflicts. However, there are also local real estate market crises when the bubble of inflated prices bursts.
At the summer 2025 meeting of the Real Estate Committee of the American Chamber of Commerce in Tashkent, representatives of the Uzbek development community reported that in their projects, the share of land cost in the price per square meter of housing amounts to up to 40%. This is more than double the rate in most countries worldwide. And it is the high price of land that today restrains market development and closes it to foreign developers.
From 2026, all residential projects will be financed by banks, and the money paid by apartment buyers will be deposited into escrow accounts, which developers will only access upon fulfilling their construction obligations. This measure is designed to protect buyers from unscrupulous developers and preserve their funds. Of course, this measure, like any protective mechanism, will lead to some increase in project cost due to the use of credit funds. At the same time, a correction in land prices for residential construction is possible, as each business model will be assessed by the bank for sustainability. To make a decision on financing a project, all land plot documents and permits must be properly prepared. This means that a significant portion of the plots currently offered on the market without proper documentation will lose their attractiveness, as they will not allow for attracting bank financing.
Land bank owners need to start systematic work today on the documentation and rights to land plots they intend to develop for housing construction, engage professional appraisal companies, and value them based on market realities and the profitability of the development business. This will lead to market stabilization, increased construction rates, and improved efficiency of development companies.
Source: Votum
