Apartment price expected to drop
- By Amarjargal Munkhbat -
- May 09,2023
On May 4, the Construction Development center presented information about the revival of the construction industry and
housing prices during a press conference. Founder of Barilga.mn G.Batsukh said, “The construction industry’s growth and decline lags behind the growth and decline of the economy. There was a small bump during the pandemic and the construction works have not started much. However, construction work is now starting and recovering from this month.
During the pandemic, the demand for housing and real estate increased thanks to the 10-billion economic stimulus program, the increase in the amount of mortgage loans and the influx of cash. The prices of new and old apartments have increased accordingly. There is no regulation to control this as there is a secondary trading of the real estate market. As for citizens, they are responsible for the rise and fall of prices based on the principle of supply and demand.”
The price of building materials rose by an average of 85 percent during the pandemic. The cost of the budget has also increased by this amount, so the price of new housing has definitely increased. There are also companies that have raised their prices on building new houses. In 2023, the amount for mortgage loan dropped, and there a monetary policy to reduce cash in the economy was carried out. In accordance, the prices of apartments and real estate are decreasing.
G.Batsukh then said, “It can be understood that the prices of apartments are expected to drop as the prices of imported construction materials are decreasing.”
He also gave information regarding whether the import conditions have returned to normalcy and noted, “70 percent of the total import goods and materials come from Zamyn-Uud port. As the road port opened, the turnover of goods has improved, and the cost of transportation has decreased. However, the carrying capacity of the truck is limited. In the past, 50 tons of cargo was loaded on one truck, but now it is limited to 25 tons. This increases the cost of transportation. Cargo transportation is not as large as it was before the pandemic. As for railway, there are not enough wagons in China, and there is a one-month waiting period.”
BUILDING MATERIAL RESEARCH CONDUCTED
At the press conference, Head of the Construction and Building Materials Production of the Construction Development Center D.Batnyam informed of the quality of building materials. His information stated, as for Mongolia, most of the construc-
tion materials are received from China and Russia.
Construction material price research is presented in two to three types. Due to the pandemic, the price increase in con-
struction materials caused enterprises difficulty. According to the minister’s order, a price survey of 890 types of construction materials was carried out, and the price increase of enterprises was also calculated.
Currently, the price of construction materials is relatively stable. Rebar prices fell by 12 percent, while cement prices
remained stable. However, the price did not reach the pre-pandemic level. In the future, the price of building materials will
D.Batnyam says regarding the building material quality, “Attention is paid on construction quality and inspections are conducted. A recent reinforcement inspection revealed several irregularities. According to the Law on Construction, the quality of building materials is determined by the certificate of conformity. The requirement to obtain a certificate of conformity is imposed on domestic and imported goods.”