Take a drive through the Mongolian capital Ulaanbaatar, one of the things that becomes immediately noticeable is the abundance of construction sites. Throughout the city, more and more apartment blocks and “living complexes” – essentially gated communities of apartment buildings – are springing up. The city’s real estate sector is visibly booming. All of this new construction, however, is still not enough to meet demand.

According to National Statistics Office (NSO) statistics, from last April  to this, the average purchasing price for apartments went up by around 20 percent. Average per square metre (sq. m.) prices in Ulaanbaatar apartment located in the centre of the city reached to 3.2 million at the end of April. It says that the average cost of an old apartment in the city is now MNT 3.01 million per square metre, a 25.5 percent increase.

The rise can be explained by a number of factors. But main cause of is largely related to the spike in freight rates due to border restrictions caused by the COVID-19 pandemic.

Housing is one of the most pressing issues in Mongolia, especially in the capital city, home to over half of the country’s population of 3.4 million. More than half of the capital city’s residents live in the city’s ger districts, with no running water, central heating or sewerage systems.