Mongolia Real Estate
First Published: Published on: Sep 22, 2013 RealEstateExpedition.com
Mongolia is the world's most sparsely populated country with an area of approximately 604,000 square miles - making it the 19th largest country on earth. Mongolia's emerging economy is highly correlated to its over US$1.3 trillion resource sector and it's no wonder the real estate sector is tied to its recourse wealth.
The property market has experienced rapid development and price appreciation in Mongolia in the past few years. Property prices reached their lowest point in the early '90s. However, a continuous 20 to 30 percent appreciation every year rewarded investors who participated since its lowest point. The property boom has occurred especially in large cities like the capital, Ulaanbaatar. However, some other cities such as Dalanzadgad, Sainshand, and Khan-Bogd have shown strong growth, as these cities are close to mining factories that attract residents from all across Mongolia.
Mongolia has no restrictions for foreign investors buying residential property. There is no requirement for physical presence; however, a valid passport is required. It is advisable to contact a real estate firm familiar with foreign investors in Mongolia to ease the buying process.
Rapid price appreciation in the real estate market in Mongolia is mainly caused by heavy demand but lower supply. High demand is caused by several factors, but an increasing influx of foreign investment and the middle class becoming financially stable enough to buy are considered most important.
No rewards come without risks and the real estate market in Mongolia has its own challenges. Investors need to do their own research before making any decisions, as there may be lack of due diligence, transparency, and accountability in the real estate sector in Mongolia (like any other sectors in a developing country). And also, the unprecedented real estate boom in the real estate market in Mongolia may not last forever as real estate booms due to resource sector growth have turned into bubbles in other parts of the world in the past.