Shortage of New Apartments Expected Over Next Two Years, Says Developers Association

The Developers Association of Kazakhstan forecasts a shortage in new apartments over the next one to two years as a result of projects frozen by leading construction companies.

According to the association, since 2006, Kazakhstan has introduced from 6.5 to 7.5 million square metres of living area every year. However, the supply in the primary real estate market has decreased by 20 percent over the last six months and the decline continues.

“Despite a record number of introduced housing areas in the market in August 2015, which included about 720,000 square metres, construction companies have frozen all new projects. This was a result of the increased costs of materials and services that appeared in light of the devaluation pressure and market volatility, as well as because of the absence of reasonable state programmes to support housing construction development in Kazakhstan. The prices for imported materials have increased by 35 percent, while the price difference for locally produced materials has increased by 15 percent,” announced Developers Association Executive Director Aslan Tukiev.

The association also warns that unreliable developers may appear in the market during these difficult times for the industry.

“This is a very important aspect since even among well-known, large foreign developers operating in Astana, there were cases when the construction process of residential complexes has been unexpectedly stopped. Small developers usually work with one or two projects, which are under great pressure and huge risks to remain unfinished,” said the association’s representative.

Most of the large construction companies are implementing anti-crisis programmes right now and reducing the total volume of their construction projects.

Get The Astana Times stories sent directly to you! Sign up via the website or subscribe to our Twitter and Telegram!