The Mongolian economy in 2015 generated lower GDP growth in comparison with 2014, but here are few reasons to be optimistic for 2016:

First, Rio Tinto has raised US$ 4.4 billion for the financing of its second phase mining operations at the Oyu Tolgoi mine in southern Mongolia. This investment almost equals 30 per cent of Mongolia’s US$12 billion economy and is surely expected to increase overall business activity not only in the mining sector but also in other sectors of the economy, including construction.

Second, in 2013 and 2014, construction activity increased dramatically, adding 17,000 units and 20,000 units in each year, a twofold or higher increase over the prior years. Most of these additions were in the low-cost housing sector and we predict this trend to continue in the coming years.

The major influence in the construction sector since mid-2013 has been the “Housing Mortgage Program,” a long-term government subsidi\sed mortgage loan program with a 30 per cent downpayment requirement along with an 8 per cent annual interest rate for apartments up to 80 sqm in size.

Due to the slowing economy, we saw property price softness in 2015 across Ulaanbaatar, and we expect prices to remain stagnant over the next few months and pick up from late 2016 and early 2017.

Thus, 2016 might prove an insightful time to invest in distressed properties as the medium- to long-term economic prospects of Mongolia look positive.