UB rental rates may quadruple

July 19, 2013 by M. Zoljargal

As the real estate market in Ulaanbaatar speculated to see an increase in demand, experts speculate that the rental cost of average and luxury apartments may rise. An Asia Pacific Investment Partners study showed that the cost of an average apartment rental in UB may rise by four times, to 80,000 MNT per meter square by 2018.

In 2013, the average cost of rent fee has been 20,000 MNT per square meter. Experts calculate that this year’s average cost will apply through 2014, but starting in 2015, the cost is likely to escalate. Analysts say that Mongolia’s political environment will probably remain stable over the next three years, and the international market’s attitude towards Mongolia will stay positive as a result. They believe the status of the political climate will play a pivotal role in increasing foreign investment in Mongolia. Another economic factor affecting the real estate market is Oyu Tolgoi’s recently launched copper concentrate export. The long-awaited export is expected to support Mongolia’s economy for the long-term and is believed to have strengthened the trust of foreign investors. Experts also believe the revised Mongolian Law on Securities, effective January 1, 2014, will enhance the domestic stock exchange and positively influence all other economic sectors.

Aside from the influence of foreign markets, the eight percent interest Ipotek Housing Loan, implemented by the Mongolian government and the Bank of Mongolia, will directly increase demand in the real estate market.

SOURCE: UB Post