Detecting Housing Market Bubbles in Uzbekistan: Empirical Application of GSADF Tests and A Composite Bubble Risk Index for Emerging Economies

Housing markets in emerging economies are vulnerable to financial bubbles due to credit expansion and speculative demand, transmitting systemic risks through non-performing loans (NPL), liquidity coverage ratio (LCR), and capital adequacy ratio (CAR). Using the UBS methodology adjusted to the socio-economic conditions of Uzbekistan, this research constructs a composite Bubble Risk Index (PXI) for the housing market of Uzbekistan. It consists of six sub-indices which include Price-to-Income (PI), Price-to-Rent (PR), Real Price Growth (RP), Loan Portfolio Growth (LP), Mortgage Growth (MG), and Construction Share (CS). It applies the Generalized Supremum Augmented Dickey-Fuller (GSADF) test to monthly data for 2020–2025 (interpolated from Central Bank of Uzbekistan and national statistics). Mortgage growth peaked at 46.8% and the results confirm existence of strong bubbles (GSADF > 2.0) for the years 2022–2023. By 2023, PXI hits 0.71, and associates positively to rising NPL and negatively to LCR/CAR. Produce Price Index (PXI) - in 2025, price growth weakens to +2.4%, as PXI falls to 0.64 The index proves powerful at predicting banking stability light of testing econometric analysis (OLS and robust regression) and human capital This is followed by the recommendation of digital real-time LTV/DSTI caps where dynamically adjustable limits for LTV/DSTI may be monitored in real globalization to reduce systemic risks (in e.g., an emerging economy such as Uzbekistan, Turkey, Pakistan, et al.). The findings enrich financial stability theory in transition economies and offer practical policy implications.