Kazakh housing construction investments surge 31.5 percent, exceed $2 billion

ASTANA – Investments in housing construction have grown 31.5 percent compared to 2017, reaching 818.9 billion tenge (US$2.2 billion), reported Kazakh Minister for Investments and Development Zhenis Kassymbek. Increased construction financing by private developers (53 percent) and the population (43.2 percent) underpinned the growth.

Zhenis Kassymbek. Photo credit: primeminister.kz.

“Per one tenge of state investments, there are eight tenge of private investments,” he said during the Nov. 7 government hour.

Housing construction is growing rapidly as part of the Nurly Zher programme launched in 2017 to provide affordable housing for Kazakh citizens. In nine months, 8.8 million square metres of housing were commissioned, an 11.6-percent increase over 2017. Construction rates are highest in the capital (1.8 million square metres), Almaty (1.3 million square metres) and the Mangistau region (910,500 square metres).

More than 77,000 families were able to improve their living conditions.

“This year, we plan to commission at least 12.1 million square metres; of those, 1.3 million or 22,000 apartments will be covered by state investments,” said Kassymbek.

The national budget allocated 148.6 billion tenge (US$402.8 million) for the programme in 2018, which will run in several directions. The first stipulates housing construction for socially vulnerable segments of the population and this year’s plan is to build 184,500 square metres of rental housing, or 3,470 apartments.

“As of Oct. 1, 1,176 rental apartments have been commissioned. Regions received 21.3 billion tenge (US$57.7 million) of the planned 26.9 billion (US$72.9 million). Of that, 96.7 percent or 20.1 billion tenge (US$54.5 million) was used. In general, in line with the task of the head of state, we plan to increase financing of rental housing construction to 50 billion tenge (US$135.5 million),” he added.

Mortgage housing construction, the second direction in the programme, received 207 billion tenge (US$561.2 million) which will be put into circulation every two years as part of bond issues.

In 2016, the National Fund allotted 67 billion tenge (US$181.6 million) to local executive bodies through Baiterek Holding. The following year, Baiterek contributed 63 billion tenge (US$170.8 million) and Samruk Kazyna Sovereign Wealth Fund contributed 77 billion tenge (US$208.7 million) to protect housing loans.

The ministry plans to allocate 100.9 billion tenge (US$273.5 million) this year to finance 141 projects to build 9,793 apartments.

“As of Nov. 5, the akimats (city administrations) received 93 billion tenge (US$252.1 million) and 180,500 square metres of housing, or 3,096 apartments, were commissioned. An additional 6,697 will be completed by the end of this year,” said Kassymbek.

The third direction is developing individual housing construction. Nearly 40,000 land plots will be connected to utilities, he noted.

Involving private real estate developers in housing construction, the objective of the fourth direction, is overseen by Kazakhstan’s Damu Entrepreneurship Development Fund. The plan is to provide 152 billion tenge (US$412 million) in subsidised loans to build 600,000 square metres of housing. To date, companies have commissioned 138,500 square metres.

The quasi-public sector is also involved in housing construction.

“As of today, 9,669 apartments with a total area of 578,400 square metres have been commissioned. Of the 97 billion tenge (US$262.9 million) allocated in 2016, the Samruk Kazyna fund signed contracts worth 75.9 billion tenge (US$205.7 million) to build commercial housing. Samruk Kazyna will have to return the remaining 50.3 billion (US$136.3 million) by the end of this year. These funds will be used to finance mortgage housing construction by local executive bodies,” he said.

Housing construction, noted Kassymbek, is on constant control.

“Construction is going on, which facilitates significant improvement of living conditions of people and development of business initiatives,” he added.