Gov’t, Samruk Kazyna Continue Work to Provide Affordable Housing

ASTANA – The need for more available and affordable housing in Kazakhstan was the subject of a meeting of the discussion club of the National Welfare Fund Samruk Kazyna which took place in mid-June.

In Soviet times, authorities tried to solve housing shortages with shared apartments organized in “bourgeois homes,” or with mass construction of panel houses. Today, however, many Kazakh citizens are seeking better quality housing, including many young families seeking to purchase their first home.

To address the issue, Kazakhstan has introduced the state programme Affordable Housing 2020 and established new mortgage loan programmes with Kazakhstan’s Lending Company (KLC) and Zhilstroysberbank. The government is also planning to launch a programme on housing modernization. However, much remains to be done on the issue. So deputies of the Mazhilis of the Republic of Kazakhstan, representatives of state bodies such as Zhilstroysberbank, KLC and Samruk Kazyna were invited to Samruk Kazyna’s June 11 expert discussion group.

According to Mazhilis Deputy Aigul Solovyova, the distribution of social housing is among the most pressing issues. Many individuals currently on the list for social housing would not receive apartments for another 44 years under the current system. a

“Forty four years?” asked discussion moderator Nurlan Yerimbetov. “Does this mean I will get my apartment only in forty four years from now if I would include myself in the waiting list?” he asked.

“Unfortunately, it’s true. To the date, only citizens who were put on the list back in 1980 – 1981 will receive their apartments,” KLC Board Chairman Bolat Dosmagambetov replied.

Under Affordable Housing 2020, Samruk Kazyna plans to put into operation no less than 3.5 million of square metres of housing in order to decrease the shortage of social housing. The initial price of one metre will cost 144 thousand tenge ($947.3) in outlying regions and 180 thousand tenge ($1,184) in the major cities of Astana, Almaty, Atyrau and Aktau.

According to the head of the Samruk Kazyna Real Estate Fund Bolat Palymbetov, social housing in Kazakhstan will not be completely free, so citizens should utilize Affordable Housing 2020, which is based on actual market prices, to help them afford housing.

Palymbetov said that the square metre price announced by the fund is justified by market analysis.

“For example, in Eastern Europe, the average price per square metre of housing varies between 600-700 euros. Why can we not have the same price level? Housing costs US$1,000 within the state programme and the average price of existing houses is about US$2,500 per square metre,” said Yerimbetov.

In response, Palymbetov said Kazakhstan’s higher housing costs are the result of climate factors, which are very harsh in Kazakhstan and require the construction of insulated walls and windows. The majority of Kazakhstan’s construction materials are also imported, which increases costs, said Palymbetov.

To help ensure the transparency of the country’s affordable housing programme, the programme’s waiting list will be published online. Thus, potential buyers will be able to participate in public auctions conducted in accordance with established rules.

“We plan to publish online the information on new construction three months prior to the end of construction. For example, 60 apartments with three bedrooms, 20 apartments with two bedrooms and 20 one-bedroom apartments are expected to be made available. People can then register for the auction, which will take place September 1- 15. On September 15, the auction will close. And the next day, September 16, we put online the whole list and potential buyers can see the results of the auction. We will then start to collect the documents,” Palymbetov said.

Samruk Kazyna Real Estate Fund expects to work with construction companies to build more than 120 multifamily homes.

Affordable Housing 2020, which is being implemented through the Samruk Kazyna Real Estate Fund, is focused primarily on assisting members of Kazakhstan’s middle-class who are solvent and will be able to buy the apartment at the end of the rental period. The majority of the construction will focus on small size apartments of around 35 square metres that will cost about $40,000.

Managing Director of the Samruk Kazyna Real Estate Fund Adylbek Kusherov added that the affordable housing programme will be implemented utilizing best practices learned from Belarus in its major housing construction programme. Following that model, housing construction factories will be established in numerous regions and the costs normally associated with connecting to regional utility networks will be eliminated. This will bring down the price of real estate in the country by encouraging the construction of economy-class housing without adversely affecting the quality or the safety of homes. As the representative of the Ministry of Regional Development of Kazakhstan Akylbek Nasypov said, Kazakhstan needs to improve the quality of housing design.

This system has so far been well received by the Kazakhstan public, said Managing Director of the Astana branch of Zhilstroysberbank Murat Sharipov. “Today, the demand for housing under construction in the country exceeds supply by 1.5 times, and in the cities of Almaty, Astana twice,” Sharipov said.

Though it is hoped that the affordable housing programme will significantly improve Kazakhstan’s housing situation, the programme is not designed to meet all of the country’s needs. It will only assist a small fraction of those needing housing and does not address the needs of the country’s rural population.

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