Apartment purchase prices in Mongolia might not decrease this year
In accordance with our wish to provide our readers with relevant and accurate news about the movements of the property market in Ulaanbaatar, we have invited Ms. P. Narmandakh, director of construction and the Apartment advisory centre for an interview.
The centre aggregates all the latest information about all new constructions and publishes its data monthly.
To start off the interview, could you give us a little more information about your center? Of course, our center was founded last year (2010). We have since been providing all the relevant information about new residential projects, their square meterage, prices and so forth. Once apartments or buildings have been sold we update the listings to reflect the current market conditions, so far we have serviced over a thousand customers. You just mentioned that your center has collected all the new residential project information from construction companies. Based on this information, have apartment prices decreased or increased over the last year.
People seem to be mostly interested in apartment purchase prices. We renew our information database monthly and thus get a pretty good general tendency over time. Compared with last year, apartment purchase prices have increased by 30.000-50.000MNT per sqm on average, of course there are differences between all the sectors and areas. What predictions can we make about future prices? Well, it seems that a lot of people in Ulaanbaatar expect prices to decrease due to the 7th district redevelopment project but our figures show that prices from construction companies keep increasing. You must also remember that the 7th district redevelopment project has only just started and will not be completed for a few years yet. During the economic crisis years, apartment demand slowed down and mortgage loans stopped. Compared with that year, how is the present situation and apartment demand? The crisis years definitely placed a huge strain on the local construction companies. We have since seen a strong recovery with more and more demand every month. Some commercial banks have also decreased their advance payment requirements to 20% and have seen enormous demand for their products. Some construction companies, such as “Bayanmongol Khoroolol” have gone even further and currently offer a very low 10% down-payment rate which is sure to attract even more people to the market. Your mentioned that your company is not only providing information but is also offering advise to apartment buyers. What advise would you give to first time buyers, what should they look at? First of all, people need to focus on quality. Last year we did a survey among citizens of Ulaanbaatar. The question ‘was, what do you mostly pay attention to when you buy an apartment?’ The answer choices where quality of apartment, implementation, size, price, location and the construction company. The majority of those queried answered that their most important factor was price and the need for a small size. Quality was in the last place of things that buyers valued the most. So this means that there is currently a lack of smaller, cheaper apartments but are willing to compromise on quality. Buyers should also be careful about the legality of the development itself. You say that the poor levels of construction quality are a problem. How can first time buyer estimate the quality of buildings still in construction or newly complicated. It takes at least in Mongolia to know what the real quality of a building is. When you buy a completed residential unit, make sure that you check all the licenses from the occupational regulations bureau of Ulaanbaatar. It is a trustworthy indicator. Even this is not enough as many apartments pass the city’s licensing tests but are still low quality constructions, this is mostly due to corruption amongst public servants. I recommend buying an apartment in winter because you can then have a better idea of the quality of the windows and see if the building already suffers in the winter temperatures. Also remember to have the size of the apartment independently valued and estimated, go through an external lawyer for your transaction. Would it not be a good idea to issue people with sample purchase and leasing contracts to give them an idea what they should be looking for and what they can expect. I have heard you are already considering this. We have been trying to do just that but construction companies are very reluctant to let us have or publish copies of their contracts. We therefore have to be inventive and find alternate means of getting our hands on contracts. Based on those we are working with lawyers to come up with a template but in any case, buyers should go through a good and independent lawyer. Could you tell us about the cheapest and the most expensive apartments currently in Ulaanbaatar? Generally, the cheapest apartments are in Songinokhairkhan district where the average square meter prices are around 800-900.000MNT per sqm. On the other hand, apartments within the Khan-Uul district (zaisan) are probably the most expensive at about 3 million MNT per square meter. As always, the quality may be the same but it is all about the location. Prices are linked to demand but also to the increasing cost of corruption for land in some areas of the city.
Source : Gogo.mn
The centre aggregates all the latest information about all new constructions and publishes its data monthly.
To start off the interview, could you give us a little more information about your center? Of course, our center was founded last year (2010). We have since been providing all the relevant information about new residential projects, their square meterage, prices and so forth. Once apartments or buildings have been sold we update the listings to reflect the current market conditions, so far we have serviced over a thousand customers. You just mentioned that your center has collected all the new residential project information from construction companies. Based on this information, have apartment prices decreased or increased over the last year.
People seem to be mostly interested in apartment purchase prices. We renew our information database monthly and thus get a pretty good general tendency over time. Compared with last year, apartment purchase prices have increased by 30.000-50.000MNT per sqm on average, of course there are differences between all the sectors and areas. What predictions can we make about future prices? Well, it seems that a lot of people in Ulaanbaatar expect prices to decrease due to the 7th district redevelopment project but our figures show that prices from construction companies keep increasing. You must also remember that the 7th district redevelopment project has only just started and will not be completed for a few years yet. During the economic crisis years, apartment demand slowed down and mortgage loans stopped. Compared with that year, how is the present situation and apartment demand? The crisis years definitely placed a huge strain on the local construction companies. We have since seen a strong recovery with more and more demand every month. Some commercial banks have also decreased their advance payment requirements to 20% and have seen enormous demand for their products. Some construction companies, such as “Bayanmongol Khoroolol” have gone even further and currently offer a very low 10% down-payment rate which is sure to attract even more people to the market. Your mentioned that your company is not only providing information but is also offering advise to apartment buyers. What advise would you give to first time buyers, what should they look at? First of all, people need to focus on quality. Last year we did a survey among citizens of Ulaanbaatar. The question ‘was, what do you mostly pay attention to when you buy an apartment?’ The answer choices where quality of apartment, implementation, size, price, location and the construction company. The majority of those queried answered that their most important factor was price and the need for a small size. Quality was in the last place of things that buyers valued the most. So this means that there is currently a lack of smaller, cheaper apartments but are willing to compromise on quality. Buyers should also be careful about the legality of the development itself. You say that the poor levels of construction quality are a problem. How can first time buyer estimate the quality of buildings still in construction or newly complicated. It takes at least in Mongolia to know what the real quality of a building is. When you buy a completed residential unit, make sure that you check all the licenses from the occupational regulations bureau of Ulaanbaatar. It is a trustworthy indicator. Even this is not enough as many apartments pass the city’s licensing tests but are still low quality constructions, this is mostly due to corruption amongst public servants. I recommend buying an apartment in winter because you can then have a better idea of the quality of the windows and see if the building already suffers in the winter temperatures. Also remember to have the size of the apartment independently valued and estimated, go through an external lawyer for your transaction. Would it not be a good idea to issue people with sample purchase and leasing contracts to give them an idea what they should be looking for and what they can expect. I have heard you are already considering this. We have been trying to do just that but construction companies are very reluctant to let us have or publish copies of their contracts. We therefore have to be inventive and find alternate means of getting our hands on contracts. Based on those we are working with lawyers to come up with a template but in any case, buyers should go through a good and independent lawyer. Could you tell us about the cheapest and the most expensive apartments currently in Ulaanbaatar? Generally, the cheapest apartments are in Songinokhairkhan district where the average square meter prices are around 800-900.000MNT per sqm. On the other hand, apartments within the Khan-Uul district (zaisan) are probably the most expensive at about 3 million MNT per square meter. As always, the quality may be the same but it is all about the location. Prices are linked to demand but also to the increasing cost of corruption for land in some areas of the city.
Source : Gogo.mn
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