On March 3, President Shavkat Mirziyoyev held a video conference on measures to build housing and develop of the mortgage market.
The meeting discussed the soothing ways of credit conditions and subsidies for housing.
According to Khalilullah Hamidov, an expert at the Center for Economic Research and Reforms, there is currently a decline in the purchasing power of low and middle-income people globally.
Providing access to housing and communal services for all by 2030 is one of the key challenges in achieving the UN Sustainable Development Goals. The World Bank estimates that by 2030, 3 billion people will need new housing and utilities. This will require the construction of 300 million new units of housing globally.
However, global housing construction is lagging behind the pace of population growth and urbanization. Especially after the global financial and economic crisis, the tightening of mortgage loans has led to a “delay” in the demand of the population in need of housing for many years, as a result insufficient have been built.
In 2020, COVID-19 further enhanced the impact of this trend. During the coronavirus crisis, declining incomes and the introduction of remote work practices have led to an increase in the demand for housing.
Globally, there is a decline in the purchasing power of low and middle-income people. If housing supply is not significantly increased and the inclusive mortgage market is not developed, the opportunities for families in need of housing, especially young people, to become homeowners in the future will be limited.
This is because housing costs typically make up a large portion of the population’s spending. In a socially oriented market economy, housing support can simultaneously reduce these costs, increase consumption, and thus increase economic activity. At the same time, research shows that government housing assistance contributes significantly to poverty reduction and social inequality in the country.
Therefore, in order to meet the demand for housing in Uzbekistan for coming years, on March 3, the President announced a comprehensive program for the development of housing.
According to him, in order to provide the population with housing and create new opportunities in our country, it is planned to carry out the following work:
- 45,000 new apartments will be built this year;
- A new system of social housing for needy families will be introduced;
- Introduce a system of preferential rental housing for homeless families in difficult living conditions;
- Facilitate credit conditions on the basis of market principles by allocating mortgage loans for a period of 6 months with a grace period of 20 years, reducing the down payment in cities from 20% to 15%;
- The amount of subsidies will be increased by paying 10% (two-thirds) of the 15% down payment to low-income families in need of improved housing as a subsidy.
Launched after the pandemic crisis, the program will not only increase housing supply, but also boost business activity and boost economic growth.
Center for Economic Research and Reform