How housing prices will change in Almaty this fall - expert
According to him, the population of Almaty hit 2.2 million people as of June 1, 2023.
«Almaty is the largest city of Kazakhstan, with a number of consequences arising from this fact. The first one is rise in migration from the regions to Almaty – from 30,000 to 40,000 people per year. Of course, Astana remains the biggest migration destination, with 50,000-60,000 people arriving in it. Nevertheless, Almaty gathers pace, which, in turn, leads to rise in demand for housing. There is also a serious control over infill development from local authorities,» Lev Tetin says.
On the one hand, this measure prohibits unregulated construction in central part of the city. On the other hand, as Tetin said, the per square meter price in central areas of Almaty keeps rising, on average, by 12-15% per annum.
The expert also points out active construction of the so-called humant-hills in the outskirts of the city, since construction in central parts is prohibited. In his words, this results in emergence of «ghettos», «economy class housing.»
«It is necessary to take a more weighted approach to the housing density issue, to the development of infrastructure of new areas. Such type of construction is not accompanied with development of social facilities, like kindergartens, outpatient clinics, schools and other important infrastructure,» he stressed.
Lev Tetin notes that in 2021, Almaty hit a record in housing construction with 2.6 million square meters commissioned. A year later, a decline was recorded – 1.7 million square meters.
«By virtue of the fact that many developers moved from Astana and other regions to Almaty, per square meter price in this city remains the highest one in the country – 700,000 tenge (1,514 US dollars). Besides, the most expensive housing projects estimated at 2.5 million tenge (5,408 US dollars) per a square meter are also built in Almaty. This is explained by the fact that Almaty has always been the logistics hub and financial center of Kazakhstan with the most active business entities,» he clarifies.
Namely, for this reason, the «core audience» ready to pay through the nose for the housing lives in Almaty.
«The second factor of housing price increase is seismic activity. Various engineering solutions, material consumption, higher consumption of reinforcement, design features of buildings - all this also leads to the rise in prices,» says Tetin.
For instance, cost of construction in Astana is 25-30% cheaper than in Almaty, he adds. The average per square meter price in Astana is 380,000 tenge (822 US dollars), while in Almaty it stands at 700,000 tenge (1,514 US dollars). Meanwhile, one should not forget about risks, since there are fault lines and certain complications in high-rise construction. Therefore, consumers in Almaty should be more severe and professional upon purchase of housing and analyze more information prior to buying a housing.
«In the first half of 2023, Almaty shows a very good dynamics with 1.2 million square meters commissioned, which is 42% more compared to the previous year. I can make a preliminary conclusion that by the end of this year Almaty will set a new record in housing commissioning volume with up to 3 million square meters to be built. Both Astana and Almaty may equal in housing commissioning indicators. This will be the first precedent for the entire independence period of Kazakhstan,» he notes.
The expert predicts that both cities will commission approximately 3 million of square meters of housing this year.
«The trend that we have been observing since holding the EXPO in Kazakhstan is that the volume of housing commissioning is almost equal to the potential demand in Almaty. Almaty is actively developing today at the expense of its own resources,» he stressed.
Today, it is more difficult for a consumer to buy a housing in Almaty, because of high cost and seismic features of the city, as well as lack of effective mortgage tools.
«Unfortunately, there is no commercial mortgage in Kazakhstan,» Tetin says, adding that only 35-38% of housing purchase deals were made via mortgage. In Russia, this indicator is at 75-78% and in Europe - at 80%.
«This sector is quite promising, but we need commercial products. I do not mean cheap money the government injects through mortgage programs, but commercial products. However, amid the current economic situation, I am not sure that we will have new commercial products in the nearest time,» Tetin emphasizes.
The expert predicts a 12-15% rise in housing prices per year.
«There will be a 12% rise in prices by the end of the year. Next year, the situation will not change, as there is no ground for prices decline. 40-45% of deals are made by buyers from regions,» he added.
The same situation is in Astana, where the demand for housing is fostered by the regions.
«Notably, residents of northern regions prefer to live in Astana, while residents of southern and western regions tend to move to Almaty. Urbanization processes are observed not only in Kazakhstan, but also across the world. Therefore, the concentration of urban vs. rural population will be 70% against 30% by 2030. And Kazakhstan is no exception,» he concluded.