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Tuesday, January 28th, 2020

KAZAKHSTAN SAW 292.3 THOU HOME PURCHASE-SALE TRANSACTIONS IN 11 MONTHS OF 2019

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by January 13, 2020 General

Urbanization is one of the key indicators of socio-economic development of a country, credited with the formation of a modern post-industrial economy characterized by a high political, financial, social and cultural society. Most countries have been demonstrating a steady trend towards urbanization, with developed countries where the urban population accounts for almost 75%, FinReview.info reports.

In Kazakhstan, the level of urbanization is quite low as of December 1, 2019, only 58.2% of the population lives in cities. Moreover, as practice shows, an increase in the urban population by 1% ensures a GDP growth of 0.12%.

One of the key factors in the growth of urbanization is the provision and accessibility of housing. According to UN standards, at least 1 square meter of housing per person is required annually. However, in 2019 Kazakhstan saw 0.6 square meters of new housing per inhabitant.

So, as of December 1, 2019, the area of commissioned housing amounted to 11.1 million square meters. Of the total number of residential buildings, 38 516 individual houses, 872 multi-apartment buildings were commissioned, 95.8 thousand apartments were built.

Of note is that in cities of Almaty (1.9 million sq. m.), Nur-Sultan (1.4 million sq. m.) and Mangystau (1 million sq. m.) the largest amount of housing space was commissioned and the largest housing growth was in Turkestan (an increase of 32.1%), Northern Kazakhstan (an increase of 23.8%) and Almaty regions (an increase of 22.6%).

In total, about 1.3 trillion tenge was allocated for housing construction, which is 23.1% more than in 2018. However, the volume of commissioned area increased by only 0.8%, which is associated both with an increase in prices per square meter and with an increase in demand for 2-, 3-room apartments of small area.

The growth in the cost of new housing in 2019 compared to the previous year amounted to 6.4%, and the secondary 6.2%. As a result, 1 square meter of new housing on average is estimated at 293.5 thousand tenge. In general, an increase in the cost of housing has been continuously observed since 2011 with an average annual rate of 7%. However, only in 2016 the prices fell after critically high growth amid the effects of the global crisis.

For the eleven months of 2019, the number of transactions in the sale of housing increased by 20.4% compared to that in 2018 and amounted to 292.3 thousand transactions.

Traditionally, most of the transactions were made in the cities of Almaty, Nur-Sultan and Karaganda region. Obviously, the reason for this was the implementation of state mortgage lending programs in the country.

The volume of mortgage loans as of 1 December 2019 increased by 35% compared to the previous year, reaching 1.7 trillion tenge, with the high demand for mortgages in the cities of Nur-Sultan (472.4 billion tenge), Almaty (422.3 billion tenge) and Eastern Kazakhstan (101.3 billion tenge).

The government programs offer a comprehensive mechanism for housing construction support tools and preferential housing acquisition, with regular improvements made to increase their effectiveness and relevance. For instance, a 12% increase in mortgage loans followed by the removal of the restrictions on the purchase of secondary housing.

Source: Kazakhtan 2050

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