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Last Updated: May 18, 2011

Ulan Bator’s housing index is up!   The world’s newest house price index rose 4.46% y-o-y to Q1 2011, though when adjusted for inflation house prices were 3.36% down y-o-y.  But in the first quarter of 2011 the index rose by 1.6%, the third quarterly rise since late 2008, when house prices began to fall due to the commodity crisis.

The index, which covers six districts of Ulan Bator, the capital, was first published in the fourth quarter of 2008 by the National Statistics Office of Mongolia.

Mongolia annual house price change graphIn the first quarter of 2011 the “average band” of Ulan Bator house prices ranged from MNT850,000 (US$702) per square meter (sq. m.), to MNT1.48 million (US$1,223) per sq. m..

However, luxury apartment prices range from MNT2 million (US$1,653) per sq. m. to MNT10 million (US$8,264) per sq. m.

As the economy returns to double-digit growth, the property market is expected to continue recovering in 2011 and 2012.

Foreigners can freely own property in Mongolia through the Immoveable Property Ownership Certificate, which is equivalent to freehold ownership.

Analysis of Mongolia Residential Property Market »

Last Updated: Jan 01, 1970

Demand is strong and rising

Rising demand for accommodation from foreign experts and an extreme shortage of housing have generated very high yields. In Ulan Bator, rental income returns (yields) on high-end property are around 18%.

Prices have been rising rapidly due to rising demand. Capital appreciation has been around 15% per annum in the past three years, according to Mongolian Properties, a development company.

Last Updated: Apr 15, 2014

Rental Income: Rental income earned by nonresident individuals is taxed at a flat rate of 20%.

Capital Gains: Capital gains are considered as part of income and nonresident individuals are taxed at a flat rate of 20% on their capital gains realized from selling real property.

Inheritance: There are no inheritance taxes in Mongolia.

Residents: Residents are taxed on their worldwide income at a flat rate of 10%.

Read Taxes and Costs  »

Last Updated: Apr 16, 2014

The round-trip costs of buying and selling a property are around 5.57% to 6.52%, including legal fees and the agent’s commission (3.5%) and transfer tax (2%).

Read Buying Guide  »

Last Updated: Jan 01, 1970

Landlord and tenant


Read Buying Guide  »

Last Updated: May 18, 2011

Mineral wealth is pushing Mongolia forward

Mongolia modern houseIn 1992, the Mongolian legislature adopted a new democratic Constitution. Since then, the government has alternated between the ex-Communist Mongolian People's Revolutionary Party (MPRP), and the National and Social Democrats and several other parties, now called the Democratic Party. The MPRP won a clear majority (46 seats of 76 seats) in the parliamentary elections, held on June 2008.

Despite the explosion of riches at the upper levels of society, wealth is very unevenly distributed. The economic growth rate of 7.25% (5-year GDP per capita growth, IMF) has not been enough to cause a substantial ‘trickle down’. A large proportion of the population lives in poverty. However democracy is securely established and no-one is seriously trying to challenge it. Serious unrest does not seem possibility.

Politics is now dominated by debates about how much of the deposits the government should claim, and what taxes are applicable, and how those revenues will be distributed.

Mining accounts for over 60% of total foreign direct investment. In October 2009, the Mongolian government passed the long-awaited Oyu Tolgoi Investment Agreement—an agreement to develop Oyu Tolgoi mine, which is considered to be one of the world’s largest untapped copper deposits.

Mongolia’s economy expanded by about 6.1% in 2010, after experiencing a 1.6% contraction in 2009 and an 8.9% growth in 2008. The economy is expected to grow by 10.3% in 2011 and by 7.6% in 2012, according to the IMF.

Recently, the central bank decided to raise the key interest rate to 11.5% mainly to curb inflationary pressures. The IMF warns that inflation may reach 25% by end-2011.

Price (sq.m): n.a. For a 120 sq. m. property, usually an apartment.
Rental Yield: n.a. For a 120 sq. m. property, usually an apartment.
Rent/month: n.a. For a 120 sq. m. property.
Income Tax: n.a. Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 6.05% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 2.00% Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Neutral Rating is based on a detailed study of each country’s law and practice.

Metro Manila Property Outlook 2015 - Savills, KMC MAG

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