Mongolia's Residential Real Estate Market Analysis 2025

Mongolia's residential property market is gathering pace on the back of continuously improving economic conditions.

This extended overview from the Global Property Guide covers key aspects of Mongolia's housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

Housing Market Snapshot


In February 2025, the nationwide housing price index rose strongly by 12.7% from the same period last year, according to the Mongol Bank, the country's central bank. However, when adjusted for inflation, house prices rose by a modest 2.8% over the same period.

Mongolia's house price annual change

For new apartments in Ulaanbaatar, Mongolia's capital and most populous city, the average price stood at MNT4.4 million (US$1,255) per square meter (sqm) in February 2025, up by 10.3% (0.6% inflation-adjusted).

By district:

  • In Bayanzurkh, the price of a newly built apartment averaged MNT 4.06 million (US$1,158) per sqm in February 2025, up by 14% (4.1% inflation-adjusted) from a year earlier.
  • In Bayangol, the average price of new apartments was MNT 4.13 million (US$1,178) per sqm, up by 16.3% (6.2% inflation-adjusted) from the previous year.
  • In Khan-Uul, new apartment prices stood at an average of MNT 4.41 million (US$1,258) per sqm, up by a modest 3.8% from a year earlier. However, in real terms, prices actually declined by 5.3%.
  • In Songinokhairkhan, new apartment prices surged by 23.4% y-o-y in February 2025 to reach MNT 3.27 million (US$933) per sqm. Real prices increased by a more moderate 12.6%.
  • In Chingeltei, new apartment prices rose by 14.3% (4.3% inflation-adjusted) y-o-y to an average of MNT 4.39 million (US$1,252) per sqm in February 2025.
  • Sukhbaatar has the highest price of newly built apartments in the capital city, at an average of MNT 5.61 million (US$1,600) per sqm in February 2025. This was a whopping increase of 31.1% (19.6% inflation-adjusted) from a year earlier.

Mongolia New Apartment Prices in Ulaanbaatar Graph

For old apartments in the capital city, the average price surged by 19% (8.6% inflation-adjusted) to MNT 4.5 million (US$1,284) per sqm in February 2025 as compared to the previous year.

By district:

  • In Bayanzurkh, old apartment prices averaged MNT 4.13 million (US$1,178) per sqm over the same period, up by 18% (7.7% inflation-adjusted) from a year ago.
  • In Bayangol, the average price of old apartments rose strongly by 21.9% y-o-y to MNT 3.89 million (US$1,110) per sqm. Real prices were up by 11.3%.
  • In Khan-Uul, old apartment prices averaged MNT4.8 million (US$1,369) per sqm in February 2025, up by 14.3% (4.3% inflation-adjusted) from the previous year.
  • In Songinokhairkhan, old apartment prices were up by 12.8% y-o-y to reach an average of MNT 3 million (US$856) per sqm. When adjusted for inflation, prices rose by just a modest 2.9%.
  • Chingeltei saw the biggest y-o-y growth in old apartment prices in Ulaanbaatar at a huge 33.5% (21.8% inflation-adjusted) to reach an average of MNT 5.46 million (US$1,557) per sqm in February 2025.
  • In Sukhbaatar, the average price of old apartments also soared by 32.5% y-o-y to MNT 5.67 million (US$1,617) per sqm. Real prices were up by 20.9%.

Mongolia Existing Apartment Prices in Ulaanbaatar Graph

The residential real estate market of Ulaanbaatar is divided between a buoyant lower end and a steadily growing upper end/luxury market:

  • Over half of the residents of Ulan Bator still live in traditional dwellings known as gers, or housing which are not well connected to permanent infrastructure. This is creating a large demand in the lower-end market, encouraged by rising wages and massive government-sponsored access to mortgage financing.
  • The luxury segment of the real estate market is experiencing gradual growth, with ongoing development projects catering to higher-income buyers and an increasing appetite for modern, high-end residences.

The "Embassy District" and the area around the State Department Store, also known as the 7 Courtyards, are two of the most popular residential areas for foreign homebuyers and tenants, as well as wealthy Mongolians.

Land in Mongolia is under state ownership, and this affects condominiums since, ultimately, they sit on land. Although the Constitution provides for the possibility of private ownership of urban and arable land, till recently, the existing legislative framework did not provide a mechanism for introducing such private land ownership.

However, the reality is that developed freehold property can be bought and sold by foreigners and by Mongolians, but that the terminology is not that of a sale of land, but that of a 'lease', or alternately, of an 'Immovable Property Ownership Certificate'.

In 2024, the Mongolian economy grew by 4.9%, mainly driven by strong growth in the mining sector, as well as robust household consumption and government spending. This followed annual expansions of 7.4% in 2023, 5% in 2022, and 1.6% in 2021 and a pandemic-induced contraction of 4.6% in 2020.

"A booming mining sector, record high coal exports, and strong household and government spending have led to buoyant economic activity despite a large contraction in agriculture due to the severe winter," said the International Monetary Fund (IMF) .

The IMF expects the economy to remain strong in the medium term, with a projected real GDP growth rate of 7% this year and 6% in 2026.

The country's GDP per capita stood at around US$6,700 in 2024 - a huge growth of 63% from a decade ago.

Mongolia GDP Per Capita Graph

Historic Perspective


A history of Mongolia's property market

The boom of the early 2000s.

Residential property prices soared in Mongolia during the 2000s, boosted by strong economic growth, high copper prices, and large increases in gold production. Economic growth averaged 7.2% annually from 2001 to 2008.

There was an influx of mining organizations, and surging international trade with countries such as China. Expatriates, foreign diplomats, and executives moved into the city en masse. Ulaanbaatar became a boom town, four-wheel drives proliferated, money was thrown about, and a great time was had. Louis Vuitton, Emporio Armani, Burberry, and Hugo Boss are now established in Ulaanbaatar.

The global economic crisis hit hard.

However, Mongolia's heavy reliance on commodity prices as a catalyst for economic growth meant that the global crisis hit hard. The price of copper, the country's single largest export, plunged by almost 65% from July 2008 to February 2009. In 2009, the economy contracted by 2.1%.

The Mongolian Tugrik (MNT) became unstable. Foreign investment dried up. Banks stopped lending. Construction projects screeched to a halt. Housing demand, especially from foreign expatriates, vanished, causing the residential property market to stagnate from 2008 to 2010.

Economic recovery.

In late 2009, the economy started to recover. Strong demand from China, combined with an upswing in world copper price,s contributed to a rapid reversal of fortunes. In 2010, the economy returned to growth, with a real GDP growth rate of 7.3%.

In the second half of 2010, the property market started to regain its momentum. Confidence from real estate developers and homebuyers slowly returned, and by 2011, residential prices rose again by a whopping 41.5% in major city centre locations.

With the passing of the long-awaited Oyu Tolgoi Investment Agreement to develop the Oyu Tolgoi mine, considered one of the world's largest untapped copper deposits, the economy expanded by 17.3% in 2011, 12.3% in 2012, and 11.6% in 2013.

Mongolia GDP Growth Graph

Politicians scared off investors, dispute with Rio Tinto.

Mongolia's macroeconomic environment changed drastically in 2014, with economic growth slowing to 7.9%. Problems began when Rio Tinto's Turquoise Hill Resources arm, then operating under its former name Ivanhoe Mines, announced plans to sell its stake in South Gobi Resources (a large Mongolian coal mine) to the Aluminum Corporation of China (Chalco) in April 2012. This was around two months before the national elections in June 2012; and the proposed deal allowed populist appealing politicians and pundits to claim that Ivanhoe/Turquoise Hill was not only trying to deceive the people of Mongolia on its biggest mining asset but was also selling a large Mongolian coal mine to China, to which Mongolia has a testy relationship.

Half a month after the deal was announced, the Mineral Resource Authority of Mongolia announced to the media it had requests to suspend South Gobi's mining licenses. On May 18, 2012, the government passed a Strategic Entities Foreign Investment Law (SEFIL) blocking its sale to a Chinese company.

Three South Gobi executives were then detained under Mongolia's controversial visa exit ban policy, and the case continuedfor  the following two years. The executives were only released in March 2015. Disputes over cost overruns, profit sharing, management control, and a US$30 million tax bill on the Oyu Tolgoi project further scared investors.

This has called into question Mongolia's ability to work with foreign corporations and investors. Foreign investments dropped by 47% in the first eight months of 2013. Again in 2014, foreign direct investment declined 81% from a year earlier, according to the central bank. This massive capital flight caused a 40% fall in the Mongolian Tugrik versus the US dollar over the last two years, greatly weakening the once hot Mongolian economy.

Economic growth slowed sharply to just 2.4% in 2015 and 1.5% in 2016. Fiscal deficit surged to 17% of GDP in 2016, up from 8.5% in 2015, 11.3% in 2014, 8.9% in 2013, and 9.1% in 2012. The government racked up debts worth nearly 90% of GDP by the end of 2016, amidst plunging coal prices.

Global coal prices plummeted by more than 60% in January 2016 from its peak levels seen five years ago.

All these have adversely affected the housing market. House prices fell by 4.4% in 2016 (-5.6% inflation-adjusted), following declines of 11.3% in 2015 and 0.6% in 2014.

The housing market picked up as the economy strengthened.

In February 2017, the IMF approved a much-needed US$5.5 billion stimulus package for Mongolia on the condition that the government will implement fiscal reforms and strengthen its banking system.

Aided by a rebound in the price of coal globally, Mongolia's economy expanded by 5.6% in 2017, by 7.7% in 2018, and by another 5.6% in 2019.

As a result of the improved economic environment, the housing market has also shown some improvements, with house prices rising by 0.4% in 2017 and 4.15% in 2018. However, real price growth was still negative.

Onset of the Covid-19 pandemic.

However, Mongolia suffered an economic contraction of 4.6% in 2020 amidst the adverse effects of the Covid-19 pandemic. The economy remained weak in 2021, registering a meager real GDP growth rate of 1.6%.

Apartment prices fell by 0.5% in 2019 and by another 0.2% in 2020. The decline was bigger in inflation-adjusted terms. In 2021, apartment prices rose by a modest 2.7%.

Post-pandemic rebound.

The economy started to gain momentum again in the succeeding years, expanding by 5% in 2022, 7.4% in 2023, and another 4.9% in 2024, mainly driven by strong growth in the mining sector, as well as robust household consumption and government spending.

Amid an improving economy, Mongolia's housing market has picked up pace. In 2023, residential property prices in Ulaanbaatar rose significantly apartments by 15.2% (6.8% inflation-adjusted) and old apartments by 10.5% (2.4% inflation-adjusted). This upward trend continued into 2024, with new apartment prices jumping 15.7% (6.2% inflation-adjusted) and old apartment prices climbing even higher at 18.7% (9.2% inflation-adjusted).

Mongolia Average Prices of Apartments Graph

Mongolia: still attractive for property investment

Despite all the problems, investing in Mongolian property remains attractive. 

Compared to other Asian markets, property prices in Mongolia are relatively low, offering potential for value appreciation.

The regulatory framework for title and property rights in Mongolia appears relatively lenient; this, combined with one of the best tax policies in Asia, makes Mongolia attractive for property ownership.

Property ownership rights exercised by international or foreign investors are identical to those enjoyed by Mongolian citizens. Foreign and domestic residents alike pay taxes, fees and fulfill other duties in compliance with the property law equally.

Sales taxes on immovable property and land are technically limited to a 2% stamp duty tax paid upon eventual sale of the property (based upon the value of the property registered on the deed, called Immovable Property certificate, or if no valuation exists, on the sales price on the primary market). There are no capital gains taxes levied on immovable property sales in Mongolia. Neither the Government nor any other legislative body can evict owners (foreign or domestic) or confiscate property for which there are Immovable Property Ownership Certificates.

Furthermore, there are no currency controls. There are no issues repatriating profits out of Mongolia as the currency is fully convertible and freely floating.

However, due diligence is essential due to legal, political, and economic uncertainties.

Supply Highlights


Construction activity improving again

Residential construction activity is showing signs of improvement, with the total number of apartments completed in residential buildings rising modestly by 3.1% y-o-y to 19,790 units in 2024 from a year earlier, according to the Mongolian Statistical Information Service. This was in contrast to the annual contraction of 17.3% registered in 2023.

The number of completed apartments averaged 17,250 units per year from 2010 to 2024 - a sharp increase from an annual average of just 4,000 units from 2003 to 2009.

Likewise, residential buildings completed in Mongolia also increased strongly by 43.1% in 2024 from the previous year, following a decline of 3% in 2023. Yet there was a huge regional variations.

By region:

  • In Ulaanbaatar, residential building completions surged by 50% y-o-y in 2024, in contrast to a decline of 12.3% in 2023.
  • In the Western region, completions fell by 16.5% y-o-y in 2024, following a whopping increase of 159.3% in the prior year.
  • In the Khangai region, completions dropped 5.3% y-o-y in 2024, a turnaround from the huge growth of 123% in the prior year.
  • In the Central region, completions surged by 72.9% last year, an improvement from an annual fall of 18.6% in 2023.
  • In the Eastern region, completions soared by 64.1% y-o-y in 2024, an acceleration from the prior year's 35.8% growth.

Mongolia Number of Apartments Completed Graph

Mortgage Market


Mortgage interest rates continue to rise

Mortgage interest rates are high. In February 2025, the weighted average interest rate for new mortgage loans issued was 11.76%, up from 11.5% in the previous month and from 10.21% in the same period last year, according to Mongol Bank.

New mortgage loans issued:

  • The average interest rate for loans denominated in domestic currency stood at 15.62% in February 2025, higher than the 15.23% in the previous month and 14.62% in the previous year.
  • The average interest rate for those drawn under the Housing Mortgage Program was 6% in February 2025, unchanged since September 2023.

Mongolia Average Interest Rate for New Mortgage Loans Graph

Similarly, the average interest rate for outstanding mortgage loans increased to 9.48% in February 2025, slightly up from 9.45% in the previous month and 9.16% in the same month last year.

Outstanding mortgage loans:

  • The interest rate for outstanding loans denominated in domestic currency averaged 14.57% in February 2025, up from 14.53% in the previous month and 13.39% a year earlier.
  • The average interest rate for those loans denominated in foreign currency was 2.72% in February 2025, down from 2.93% in January 2025 and 3.7% in February 2024.
  • The average interest rate for those drawn under the Housing Mortgage Program was 6.64% in February 2025, from 6.66% in the previous month and 6.85% in the prior year.

Mongolia Average Interest Rate for Oustanding Mortgage Loans Graph

The loan-to-value (LTV) ratio is 70% of the appraised value of the property. The term period is usually over 20 years.

Mortgage interest rates are expected to continue increasing in the coming months after Mongolia's central bank decided to raise its key interest rate by 200 basis points to 12% in March 2025, in an effort to rein in inflationary pressures.

"Annual inflation continued to rise, reaching 9.6 percent nationwide and 9.7 percent in Ulaanbaatar as of January 2025. The increase in electricity price and its indirect effects, as well as the price increases in services, rent, and imported goods, reflecting the strong economic activity and wage growth, were greater than expected," said the Mongol Bank in its Monetary Policy Statement.

"The set of monetary and macroprudential policy decisions aligns with the Bank of Mongolia's objective of stabilizing inflation at 5 percent within a ±2 percentage point range by 2027, while mitigating the risk of rising inflation expectations and persistent second-round effects and supporting macroeconomic and financial sector stability in the medium term," added the central bank.

Mortgage loans increasing rapidly, but market still underdeveloped

During 2024, the total value of new mortgage loans issued reached nearly MNT 3.03 trillion (US$862.38 million), up by a huge 49.1% from the previous year, following an annual increase of 45.3% in 2023 and a decline of 7.8% in 2022, based on figures released by Mongol Bank.

Then in the first two months of 2025, new mortgage loans issued increased by a modest 4.2% to MNT 425.91 billion (US$121.41 million). About 59.7% of which were from banks' own sources while the other 40.3% were from the Housing Mortgage Program.

Mongolia New Mortgage Loans Issued Graph

As such, the total amount of outstanding mortgage loans in Mongolia rose strongly by 23.8% y-o-y to MNT 9.67 trillion (US$2.76 billion) as of February 2025, according to the central bank. This followed an annual average growth of 17.7% in 2021-24 and 5.2% in 2017-20.

By source:

  • Banks' own sources: MNT 3.41 trillion (US$972.41 million) in February 2025, up by 37.4% from the same period last year
  • Housing Mortgage Program: MNT 6.19 trillion (US$1.76 billion), up by 17% from a year earlier
  • Other sources: MNT 71.02 billion (US$20.25 million), up by a huge 62.8% from the previous year

Yet, Mongolia's mortgage market is still underdeveloped and very small. Housing finance was introduced only in early 2000s. During 2024, the size of the mortgage market was equivalent to 11.5% of the country's GDP - slightly up from about 10.9% of GDP in 2023 but a contraction from 12% in 2022, 13% in 2021, and 13.1% in 2020.

There were 124,085 mortgage loan borrowers in Mongolia in February 2025, up by 7.3% from the prior year.

The share of past due in arrears in the total outstanding mortgage loans was 1.31% as of February 2025, slightly up from 1.16% in the same period last year. Those that are doubtful and loss mortgage loans accounted for 0.19% and 0.45%, respectively.

Mongolia's banking sector is highly concentrated, with four banks (XacBank, Khan Bank, Golomt Bank, and Trade and Development Bank) dominating the market.

Mongolia Outstanding Mortgage Loans Graph

Government support boosts low-end market

The Mongolian government introduced a low-cost mortgage lending scheme in 2012 which is the most significant development in terms of residential real estate in the past few years.

When it was introduced, the "Housing Mortgage Program" offered interest rates as low as 8% for purchasing apartments, with a term period of up to 20 years (which has since been extended to 30 years).

Initially, the program was meant for poorer households looking to purchase apartments under the "100,000 homes project," which will provide 75,000 homes within the capital alone. But in order to reduce pressures created by rapid purchase price increases, the program was extended to all first time buyers. To qualify for the mortgage, potential homeowners should not own any existing apartments, and the apartments they buy must be new-build developments of 80 square metres (sq. m.) or less.

As of September 2017, mortgage loans worth MNT 233 billion (US$66.44 million) were issued to more than 2,700 borrowers.

In 2018, the central bank transferred around MNT 118 billion (US$33.65 million) out of MNT 310 billion (US$88.39 million) funding for the program, according to A. Enkhjin, the Director of the Reserve Management and Financial Markets Department of the Mongol Bank.

"Through the mortgage loan, the loans worth about MNT 100 billion were given to 1,152 borrowers in December 2018," said A. Enkhjin. "Last year, 4,676 flats were sold through the mortgage loans."

By the end of 2018, the government increased the program's annual allocation to MNT 500 billion (US$142.57 million). The funds were distributed to commercial banks through the central bank.

In addition, housing loans up to MNT 60 million (US$17,108) are issued to individuals for the construction of a private house that satisfies requirements such as not being bigger than 120 sq. m., being energy efficient, and having engineering facilities.

The central bank issued Decree A-392 on October 1, 2020, to lower the interest rate on housing mortgage loans to 6%. This reduced rate applies only to new mortgage loans issued from that date onward.

Currently, participating banks under the program provide loans of up to MNT 160 million (US$45,625) to eligible borrowers, with a down payment of 30%.

In October 2024, Minister of Urban Planning, Construction, and Housing Batsuuri Jamba announced plans to raise mortgage loan sources to MNT 1.2 trillion (US$342.19 million) for the year 2025. This initiative aims to provide loans to 60,000 households, with over half targeted at rural areas. Additionally, the government plans to commission apartments for 150,000 households over the next four years.

The total number of mortgage borrowers under the Housing Mortgage Program reached 91,192 in February 2025 - an increase of 5.5% from the previous year.

As of February 2025, the total value of outstanding mortgage loans issued under the Housing Mortgage Program rose strongly by 17% to MNT 6.19 trillion (US$1.76 billion) as compared to the same period last year, following annual growth of 17.2% in 2024, 10% in 2023, 10.3% in 2022 and 17.7% in 2021.

Mongolia Outstanding Mortgage Loans Under the Housing Mortgage Program Graph

Rental Market


Tight rental market, high rental yields

Gross rental yields for luxury residential properties in Ulaanbaatar are high, ranging from 10.43% to 12.52%, with a city average of 11.07% in Q2 2025, according to recent research conducted by the Global Property Guide. Smaller properties typically offer higher rental yields.

By major district:

  • In Sukhbaatar - Downtown UB, gross rental yields range from as high as 12.01% for studio-type properties to 7.8% for four-bedroom or larger properties.
  • In Bayangol, residential properties offer rental yields ranging from 11.52% for studio-type properties to 9.61% for two-bedroom properties.
  • In Khan-Uul, rental yields range from as high as 13.71% for studio-type properties to 12% for four-bedroom or larger properties.
  • In Songinokhairkhan, residential properties offer rental returns ranging from 11.77% for smaller units to 10.58% for bigger units.
  • In Bayanzurkh, gross rental yields range from 12.63% for studio-type properties to 7.13% for bigger three-bedroom units.

While rental prices may still be affordable compared to major international cities, they can be expensive for average Mongolian households. The demand from expatriates, diplomats, and wealthier locals drives up prices in prime areas, especially for modern apartments with better amenities.

Currently, studio-type apartments in Ulaanbaatar rent for around MNT1.05 million (US$300) to MNT1.4 million (US$400) per month; one-bedroom properties are rented for MNT1.4 million (US$400) to MNT2.1 million (US$600) per month; two-bedroom properties for MNT1.75 million (US$500) to MNT3.51 million (US$1,000) per month; three-bedroom properties for MNT3.16 million (US$900) to MNT5.61 million (US$1,600) per month, and; four-bedroom or bigger properties are rented for about MNT6.31 million (US$1,800) to MNT7.72 million (US$2,200) per month.

State Rental Housing Program launched to address high rents

Because of high rents and a tight supply of affordable housing, the government launched the State Rental Housing Program in July 2015. The program aims to provide affordable housing to low- and middle-income citizens, typically offering rental rates below prevailing market prices to ensure accessibility.

Applicants are prioritized based on age, income, and other factors that determine their need for access to low-cost rental housing.

Originally, the program aimed to establish 16,000 rental apartments in Ulaanbaatar and an additional 4,000 units in provincial areas.

In early 2017, about 360 apartments built in Ulaanbaatar and various provinces were integrated into the state rental housing reserve. Then in June 2019, an additional 1,542 apartments constructed in Ulaanbaatar, Orkhon, Khuvsgul, and Gobi-Altai were incorporated into the rental housing fund.

In late 2024, the government launched new rental housing projects to support vulnerable groups. A project in Uvs Province was announced in October for elderly and disabled citizens, while another in Dundgovi Province was launched in November under the Human Resources Development Sub-Program.

Socio-Economic Context


Strong economic growth, improving public finances

The economy is projected to expand by 7% this year and by another 6% in 2026, following annual growth of 4.9% in 2024, 7.4% in 2023, and 5% in 2022, based on IMF estimates.

"Economic growth in 2025 is expected to be supported by a recovery in the agricultural sector, an increase in mining activity given the expansion of copper production, fiscal expansion as well as upcoming construction works related to large-scale infrastructure projects," said the central bank.

Mongolia's parliament has recently approved the country's first-ever balanced budget for 2025. Both revenue and spending are set at around MNT 33.5 trillion (US$9.8 billion), which is equal to 35.2% of the country's GDP, resulting to a balanced budget. Government debt is expected to stabilize at about 39% of GDP.

The labour market remains tight. In Q4 2024, the country's unemployment rate stood at 5.3%, down from 6.1% in the previous quarter but up from 3.9% in the same period last year.

Nationwide inflation rose to 9.6% in February 2025 from 8.7% in the previous month and 7% in the same period last year, according to Mongol Bank. This marked the highest inflation since September 2023.

Inflation averaged 5.3% from 2015 to 2021 before rising to 15.2% in 2022. It gradually eased to 10.3% in 2023 and further to 6.5% in 2024.

Mongolia Inflation Percentage Graph

Sources:

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