Should You Invest?
Bordered by two of the economic superpowers and with an
extensive supply of natural resources, Mongolia's economy should
have every chance to prosper over the coming years. Demand for
property is huge and unlikely to be fully satisfied by supply for
some years making for some very promising investment
opportunities.
- Rising demand for accommodation from foreign experts and an
extreme shortage of housing have generated very high yields. In
Ulanbaatar, rental income returns (yields) on high-end property are
around 18%.
- Capital appreciation has been around 15% per
annum for the past three years.
- Prices have been rising rapidly due to increasing demand.
- Experts have likened Mongolia's current market positioning as
one reminiscent of Shanghai before its enormous economic growth
started.
- Price growth is very dependant upon economic performance, which
remains closely tied to trade with China.
- Rapidly growing tourist industry.
Price History
The main factor driving increases is the expectation of vast
amounts of EU redevelopment money which would improve
infrastructure, services and employment opportunities. A cut in tax
to 16 per cent has also raised consumer confidence as well as
giving the local workforce increased spending power. This
confidence, it is believed, will continue to influence the property
market in a positive way. The current lack of supply of quality
accommodation coupled with an expanding property market, means the
future of the market should be strong.
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