Page 1 OVERVIEW Quick Stats Change from Q4 16 Q1 16 Prices Absorption Kazakhstan is the largest country in Central Asia. The relocation of the capital city functions to Astana in 1998 offered long-term growth and development opportunities. According to information published by the Statistics Agency of the Republic of Kazakhstan, the population of Astana comprises ca. 872,655 people, with the “Almaly” district share being 44%, the “Esil” district – 16%, and the “Saryarka” district – 41% of the total number. The fixed capital investments in the period Jan- Apr 2017 in Astana comprised KZT 195,399 Mln, which represents a 31.4% increase compared to the same period of 2016. The share of fixed capital investment in Astana comprised 10.5% of the total volume of capital investment in the republic. During the same period the investments in residential construction in Astana comprised KZT 36,526, which represents a slight increase compared to the same period of 2016. The share of disbursed funds in housing construction within the total volume of investment in fixed capital comprised approximately 18%. During the period Jan-Apr 2017 the total volume of commissioned residential space in Kazakhstan increased by 48.1% compared to the same period of 2016, with the largest shares of residential space commissioned in Astana (30.41%), Almaty (18.8%) and Mangistau Province (8.44%). The total housing stock commissioned in the same period in Astana comprised 2,256,920 sqm, representing a 28.3% increase on a year-on-year basis. To date, the mood of market participants in general is becoming more negative, due to economic problems both domestically and globally, such as decreasing global oil prices and the significant correction of the national currency exchange rate. A noticeable decrease of prices in US Dollar terms can be observed on the residential real estate market of the capital. It is also necessary to note the considerably increased demand and growth of the number of sale-purchase transactions of apartments in new buildings during the reported period, caused by the fact that many developers kept prices in KZT after the exchange rate correction, thus noticeably decreasing prices in USD equivalent. In addition, the "EXPO-2017" event may slightly neutralize the negative effect on the market of the capital in 2017. Source: Kazakhstan Statistics Agency Source: Kazakhstan Statistics Agency Source: Kazakhstan Statistics Agency Hot Topics The correction of the exchange rate of the Tenge caused a decrease of prices in USD terms in combination with a growth of the number of sale-purchase transactions; Investments in housing construction in Astana in the period January-April 2017 comprised 36,526 Mln Tenge; The total residential space commissioned in the period January-April 2017 in Kazakhstan as a whole comprised 1,115,966 square meters, which represents a 48.1% increase compared to the same period of 2016. The average price levels on the Astana primary and secondary markets in Q1 2017 practically unchanged in comparison with the same period of 2016. Astana Market View Residential Q1 2017
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Page 1
OVERVIEW
Quick Stats Change
from
Q4
16
Q1
16
Prices
Absorption
Kazakhstan is the largest country in Central Asia.
The relocation of the capital city functions to
Astana in 1998 offered long-term growth and
development opportunities.
According to information published by the
Statistics Agency of the Republic of Kazakhstan,
the population of Astana comprises ca. 872,655
people, with the “Almaly” district share being
44%, the “Esil” district – 16%, and the “Saryarka”
district – 41% of the total number.
The fixed capital investments in the period Jan-
Apr 2017 in Astana comprised KZT 195,399 Mln,
which represents a 31.4% increase compared to
the same period of 2016. The share of fixed
capital investment in Astana comprised 10.5% of
the total volume of capital investment in the
republic.
During the same period the investments in
residential construction in Astana comprised KZT
36,526, which represents a slight increase
compared to the same period of 2016. The share
of disbursed funds in housing construction
within the total volume of investment in fixed
capital comprised approximately 18%.
During the period Jan-Apr 2017 the total volume
of commissioned residential space in Kazakhstan
increased by 48.1% compared to the same
period of 2016, with the largest shares of
residential space commissioned in Astana
(30.41%), Almaty (18.8%) and Mangistau Province
(8.44%).
The total housing stock commissioned in the
same period in Astana comprised 2,256,920 sqm,
representing a 28.3% increase on a year-on-year
basis.
To date, the mood of market participants in
general is becoming more negative, due to
economic problems both domestically and
globally, such as decreasing global oil prices and
the significant correction of the national currency
exchange rate. A noticeable decrease of prices in
US Dollar terms can be observed on the
residential real estate market of the capital.
It is also necessary to note the considerably
increased demand and growth of the number of
sale-purchase transactions of apartments in new
buildings during the reported period, caused by
the fact that many developers kept prices in KZT
after the exchange rate correction, thus
noticeably decreasing prices in USD equivalent.
In addition, the "EXPO-2017" event may slightly
neutralize the negative effect on the market of
the capital in 2017.
Source: Kazakhstan Statistics Agency
Source: Kazakhstan Statistics Agency
Source: Kazakhstan Statistics Agency
Hot Topics
The correction of the
exchange rate of the Tenge
caused a decrease of prices in
USD terms in combination
with a growth of the number
of sale-purchase transactions;
Investments in housing
construction in Astana in the
period January-April 2017
comprised 36,526 Mln Tenge;
The total residential space
commissioned in the period
January-April 2017 in
Kazakhstan as a whole
comprised 1,115,966 square
meters, which represents a
48.1% increase compared to
the same period of 2016.
The average price levels on
the Astana primary and
secondary markets in Q1 2017
practically unchanged in
comparison with the same
period of 2016.
Astana Market View
Residential Q1 2017
Page 2
A new housing construction program - "Affordable Housing - 2020" –
was given a start during 2012 as a supplement to the already existing
housing construction program for the period 2011-2014, envisaging
the construction of affordable housing units for rent with subsequent
buy-out. This program is aimed at sustaining a volume of
construction of new residential space at the level of 6 Mln sqm per
year, and reaching 10 Mln sqm per year by 2020. According to
information from the city authorities, ca. 50,000 apartments are
planned to be constructed in Astana by 2020. A campaign for
purchasing of apartments under the “lease-with-subsequent-buyout”
scheme by all categories of the population has been actively
implemented in 2013.
This housing construction program was designed by the ‘Samruk Kazyna’
National Welfare Fund, and the basic requirement for its implementation
is that the developer would take part in the construction and sales of the
residential project. The program provides for 3 options of project
development:
via target deposit – i.e. the Fund allocates the money to banks, and
the banks – further to developers;
scheme, where Akimats provide land plots and infrastructure while the
‘Samruk Kazyna’ Real Estate Fund acts as the developer and investor;
partnership of the Fund and private companies.
The housing units constructed under this program will be distributed via
several schemes:
ordinary lease,
lease with subsequent purchase,
direct sale and sale by installments via Zhilstroysberbank.
In this relation, foreign and local investors and developers have started
considering the “economy” class residential market as a field for potential
investment, while during the pre-crisis period the construction of
“business” and “elite” class projects was dominating the residential
market. At the present moment, the majority of local and international
developers have adopted a wait-and-see attitude and are not involving in
activities on the Kazakhstan real estate market.
The "Affordable Housing 2020” program assumes two different types of
transferring the residential space to the population: direct sales and lease
with subsequent buyout. In this case, the lease-with-subsequent-buyout
Agreement may provide for the right of pre-term acquisition of the
residential property by the Lessee.
A brief analysis of the average price levels of residential projects in the
New City part of Astana showed that the most expensive apartments are
offered in such projects as ‘Green Village’, ‘Rixos Khan Shatyr Residences’,