The real estate market of Kazakhstan has seen better days. The number of house transactions has almost halved over the past two months. Experts named several reasons for this, including inflation, higher mortgage rates, external factors taking place in neighboring countries, and tougher threshold figures for pension savings. All this together led to stagnation in the housing market, they said. Analysts informed that record figures of property deals have been registered at the beginning of the year. The demand for primary and secondary housing in the country ramped up in January and February. Those months, people in Kazakhstan made 33,000 and 46,500 deals, respectively. The number of house transactions in March hit a record high of 68,700. However, the demand curve went down afterwards. If the decline in April reached 23 percent, then in May it almost halved. Despite this, house prices in Kazakhstan continue to rise.
“The prices keep rising. We import about 30 percent of all materials from Russia. Considering the currency ratio of one to nine, the price rises by 10-15 or 20 percent, and deals keep declining. Moreover, the sale price is slightly reduced now due to discounts, and property developers are just trapped,” said general director of a construction company Vyacheslav Lazarev.
According to industry experts, the state needs to help stimulate consumer demand for housing. Reducing transactions will lead to the bankruptcy of many construction companies, which in turn will entail unemployment and, in general, losses for the country's economy, experts note.
“As regards our company, the rate of transactions fell by 25-30 percent. We can witness that similar declines occur in general within the industry. It is necessary to maintain the demand for real estate in the medium term. We just need some additional impulses like introducing a new program ‘11-20-25’ or offering a different interest rate, which will also give an additional incentive. It is very important that the government approves this program. The projects’ closure will simply lead to the fact that many people will find themselves without a job. Therefore, stimulating the construction industry is vital to our economy,” added Lazarev.
