Mortgaging rises in Kazakhstan

In May this year, the mortgage market experienced a spike. For the month alone, the volume of mortgage loans in the country has increased by 13.4pct, or by KZT118bn.

This is the most significant level of monthly growth in the mortgage market over the last 5 years. A larger monthly increase was established in May 2012, when the second-tier banks' overall mortgage portfolio performance increased by KZT120bn compared to April. In May last year, the value of mortgage loans in the Republic of Kazakhstan grew by KZT6.9bn, only 0.8pct.

Resumed activity in the mortgage market is observed against the background of increased residential property sales. For the first half of this year, nearly 111,800 transactions for the purchase and sale of housing have been registered in Kazakhstan, being 27.3pct more than for the same period in 2016.

In particular, 29.5% more apartments (77,300) have been purchased this year than in January-June of the previous year. The number of transactions for sales of individual houses for the year has increased by 22.6pct and amounted to 34,500.

In May this year, Kazakh banks have increased their portfolio of mortgage loans in all regions of the country, whereas in May last year the growth was registered in 10 regions only.

The largest increase in the mortgage segment in May 2017 was shown by the banks operating in Almaty City as the loans have increased by 44.2 billion tenge, or 17.4pct over the month. This accounts for 37 percent of the nationwide market growth for the month. As a result, Almaty's share in the mortgage market has risen up to 29.9pct from 28.9pct in April.

The capital city, Astana, runs second. For the month, the regional mortgage market has expanded by KZT16.3 bn, or 7.8%. The increase in the loan portfolio is lower than in Almaty. Therefore, the share of Astana in the total volume of mortgage loans in Kazakhstan has declined down to 22.5pct from 23.7pct over the month.

The Karaganda region rounds out the top three as the volume of mortgage loans granted to the residents of the region has increased by KZT12.2bn, or 28 percent. The region's share in the mortgage market of Kazakhstan has grown up to 5.6pct from 5pct stated a month earlier.