Saturday, February 25, 2012

Mongolia: Hot Property

THE REAL ESTATE MARKET IN MONGOLIA IS EXPECTED TO EXPAND SIGNIFICANTLY IN THE COMING YEARS, THANKS IN PART TO INCREASING INCOMES AND RAPID URBANISATION CREATED BY THE COUNTRY’S MINERAL WEALTH.

According to the World Bank, revenues from Tavan Tolgoi, a coking coal mine, and Oyu Tolgoi, a copper mine, are expected to propel real GDP growth from the current level of $7bn to $24bn in the next decade. GDP per capita, meanwhile, is expected to soar from $3000 to $8000 by 2016. The government has also pledged to increase the salaries of state workers by 53% in 2012.

To prepare for the expected influx of people into the city, the government is developing a “100,000 Apartments Programme” that will see 75,000 homes built in the city and 25,000 constructed in the countryside. In January, city officials also announced a series of projects aimed at improving Ulaanbaatar’s infrastructure, with MNT70bn ($51.28m) allocated for road repair and construction, MNT45.3bn ($33.19m) for public transportation and MNT330m ($241,758) for the construction of 40 kindergartens.

In September 2011, the US Agency for International Development and the Mongolian Mortgage Corporation announced a guarantee facility that will cover approximately $4m in mortgage-backed bonds, of which the US Treasury guaranteed 50%.

When speaking with the media in August 2011, Kh. Battulga, former minister of roads, construction, transportation and urban development, stated that the country’s Development Bank is backing the 100,000 Apartments Programme, adding that citizens with low and average incomes will be able to take part in the programme with 12-year loans at 4% a year. “It is estimated the project will cost MNT800bn ($586.08m),” he said.

According to data from the National Statistical Office released in May 2011, housing prices in Ulaanbaatar ranged from MNT850,000 ($623) per sq metre to MNT1.48m ($1084) per sq metre, while luxury apartment prices ranged from MNT2m ($1465) per sq metre to MNT10m ($7326) per sq metre.

“The high-end real estate market is displaying remarkable growth,” noted local real estate firm MAD Investment Solutions in its 2012 report. “Prices for [high-end residential] units … nearly doubled from the first quarter of 2010 to the first quarter of 2011.”

MAD said some of the highest prices it has seen were among units in the city centre’s 40,000-apartment area, adding that the knowledge-based economy that is being created by the influx of international capital has resulted in an increase in demand for office space.

“Grade-A offices in the city experience high occupancy rates, typically over 85%, although new developments such as Blue Sky Tower are presently exhibiting higher vacancies – 10% or more. Over 73% of the total grade-A office supply in Ulaanbaatar is located within the Sükhbaatar district, at the heart of the central business district,” the report noted.

The expected influx of foreign workers, entrepreneurs and investors from major firms such as Rio Tinto, Ivanhoe Mines and Peabody Energy should also create an increase in demand for the hotel and serviced apartments segments.

Research firm R2 predicts there will be 130 serviced apartments available by 2013, but that this will expand once the Hong Kong-based Shangri-La Group opens its 273-room hotel, scheduled for the same year. Hyatt Regency Ulaanbaatar is also scheduled to open in 2014 with 259 rooms, including 43 suites and 22 serviced apartments.

Other areas expecting to see growth are towns located near the country’s vast mining projects. Indeed, the government announced in January 2012 that 3000 apartments, roads, a school, kindergarten, hospital, hotel and shopping centres will be built near Oyu Tolgoi, with the MNT100bn ($73.26m) project to be financed by Ivanhoe Mines, Rio Tinto and the state-run Tavan Tolgoi firm.

While Mongolia’s mineral wealth is generating unprecedented optimism in the country’s property sector, key infrastructure will need to be built at a parallel speed to new housing construction. If the government’s plans for infrastructure works continue on schedule, there should be plenty of opportunities in accommodations development.

Source: M.A.D Mongolia

9 comments:

  1. Greater Noida real estate has the wonderful advantage of being in the locality of Delhi NCR.To buy flat in Greater Noida, one has a menu of great housing choices in residential Greater Noida. Apartments & flats in the city are world-class and loaded with premium amenities. Greenery in the region is the perfect setting to have a flat in Greater Noida.

    ReplyDelete
  2. Wow what a nice post.I am impressed from it.



    Thanks for more sharing.......



    Stratus Building Solutions

    ReplyDelete
  3. Megapolis Greater Noida is a path breaking housing choice. Proximity with the national capital has paved way for world class housing and lifestyle amenities in the contemporary India. Lush greenery had made a perfect setting in getting a world class accommodation in Greater Noida.

    ReplyDelete
  4. Wow! It's a fantastic post i like it and i think everybody like the post.
    Thanks a lot

    ReplyDelete
  5. Mongolia hot property shown by you is excellent. Thanks for sharing
    real estate course

    ReplyDelete
  6. Finally! Guys out here are looking forward for you very much!
    Skies Miltonia

    ReplyDelete
  7. Projects in Greater Noida West

    Greater Noida Projects are Most Valuable for us and Government. The projects brought up by the developers provide a large range of residential opportunities whose prices will fall in the range of Rs. 19 lakh to Rs. 50 lakhs.

    Keywords-
    Projects in Greater Noida West

    Contact Us-
    D-67, Sector - 2, Noida
    Call Us: +91-8010010000

    URL-
    http://greater-noida-west.com/features.html

    ReplyDelete
  8. Greater Noida West

    Greater Noida West- world city where the grass is greener, the roads wider, the air cleaner and proactive governance is a way of life. No delays, no congestion, no problems.

    Keywords-
    Greater Noida West, Property requirements Greater Noida West, Flats Greater Noida West, Greater Noida West Projects, Apartments in Greater Noida West

    Contact Us-
    D-67, Sector - 2, Noida
    Call Us: +91-8010010000

    URL-
    http://greater-noida-west.com/map.html

    ReplyDelete
  9. Well and informative content provided about THE REAL ESTATE MARKET IN MONGOLIA IS EXPECTED TO EXPAND SIGNIFICANTLY IN THE COMING YEARS, THANKS IN PART TO INCREASING INCOMES AND RAPID URBANISATION CREATED BY THE COUNTRY’S MINERAL WEALTH. Thanks for given this information here about this blog.
    3bhk Flats for Rent in Alaknanda

    ReplyDelete