The Decade-Long Plan Addresses Unresolved Issues
By the end of 2023, Kazakhstan had 646,000 people on the housing waiting list. By the end of 2033, if the average annual growth rate of 6.9% continues, this number could rise to 1.3 million, necessitating the construction of 79.3 million square meters, or an annual construction of 7.9 million square meters. That's the plan.
“Many developers, bypassing established procedures, continue to attract funds from shareholders by signing contracts without providing guarantees. The Mazhilis has developed a draft law on shared construction. The Ministry of Industry and Construction must work with the deputies to develop a mechanism for contract signing to eliminate risks for citizens,” said the Prime Minister of Kazakhstan, Olzhas Bektenov, at a government meeting discussing these issues on December 10, 2024. “Additionally, the lists of housing applicants must be updated, and the inventory of these lists needs to be expedited.”
The Minister of Industry and Construction, Kanat Sharalpaev, reported at the meeting that a law was adopted in 2024 regarding housing and construction policy, which transfers the functions of akimats for registering and allocating housing to the Otbasy Bank.
Housing will be allocated based on the date of registration and the income level of citizens. A right to privatize rental housing without buyout will be introduced, affecting 50,000 people. The norms for housing privatization came into effect on December 4, and other new provisions of the law will start operating in May 2025.
The minister also mentioned the introduction of an urban planning expertise institution at the beginning of the year, aimed at preventing deviations from architectural norms during urban planning stages. Projects will be checked by the RGP "Gosexpertiza" before approval. This will reduce corruption risks, for example, in issuing initial permitting documentation.
In 2024, 330 billion tenge has been allocated for state support for the purchase of over 22,000 rental apartments. By the end of the year, the commissioning of over 10,000 credit housing apartments is planned, financed by the issuance of government securities amounting to 165 billion tenge. Through preferential mortgage loans at 2-5%, 7,861 loans amounting to 94.5 billion tenge have already been issued. Additionally, 83 billion tenge has been allocated for the construction of engineering networks in residential development areas.
Starting in May 2024, a new housing program called "Nauryz" will be launched. It is planned to issue 12,000 loans totaling 300 billion tenge. More than 6,000 loans amounting to 172 billion tenge have already been issued.
The volume of construction work in Kazakhstan for the first 11 months of 2024 reached nearly 7 trillion tenge. The sector's share is 5.6% of the country's GDP, according to Sharalpaev. Approximately 670,000 people are employed, with 53,000 enterprises operating, of which 2,903 produce construction materials.
From January to November 2024, 16.3 million square meters have been constructed. By the end of 2024, a record 18 million square meters of housing are expected to be commissioned, the minister predicts.
“The ministry has taken unprecedented measures to stimulate housing construction. In 2024, about 965 billion tenge is planned for these purposes from all sources, which will ensure the occupancy of 41,000 new apartments for over 160,000 citizens,” said Sharalpaev.
Only Fairytales Happen Quickly
The overall financing plan through the buyback of akimat bonds for investing in rental housing with the right of privatization amounts to 272 billion tenge for the purchase of 17,300 apartments.
Thus, one average apartment will cost Kazakhstan 16 million tenge.
Under the credit housing program, financed through bond buybacks, akimats were provided with 100% funding or 165.1 billion tenge as of December 10. The expected housing commissioning plan is for 10,000 apartments, of which 5,700 apartments have been completed.
The government also guaranteed shared construction in 2024 and subsidized developer loans amounting to 165.6 billion tenge, or 93% of the planned volume. By the end of the year, this amount was expected to increase to 178.2 billion tenge, protecting the funds of 7,000 citizens participating in commercial housing construction.
Akimats in Kazakhstan bought only 9,200 apartments, or 53% of the planned 17,300 apartments for rental housing with the right of privatization by December 10, although they were provided with 91% of the planned funds, stated Rustam Karagoyin, chairman of the board of JSC "NUH "Baiterek".
“For rental housing under the right of privatization, the overall financing plan through the buyback of bonds amounts to 272 billion tenge for the purchase of 17,300 apartments,” said Karagoyin, presenting his report at the government meeting. “As of December 10, akimats have repurchased bonds amounting to 248.5 billion or 91% of the annual plan. The last tranche for akimats of 23.5 billion tenge was scheduled for December 17, 2024, after receiving funds from JSC "Samruk Kazyna".
Akimats have utilized 169.4 billion tenge, or 68% of the allocated funds. Akimats with low fund utilization include: Almaty Region — 16% or 2.5 billion out of 16.2 billion tenge, North Kazakhstan — 32% or 1.2 billion out of 3.9 billion tenge, Almaty — 32% or 8.2 billion out of 25.4 billion tenge, Aktobe — 34% or 4.4 billion out of 13.2 billion tenge, and Karaganda — 35% or 4.6 billion out of 13.2 billion tenge.
As of December 6, 2024, akimats have announced competitions for the purchase of 16,900 apartments (98% of the plan), with only 9,200 apartments purchased or 53% of the plan.
Thus, out of the planned 17,300 apartments, akimats had bought 9,200 apartments by December 6. Akimats with the least number of purchased apartments include: Astana — 0 out of a plan for 1,500 apartments, Almaty — 88 apartments or 6% of the plan for 1,500, Almaty Region — 16% or 155 apartments out of 989.
Out of 10,000 Credit Housing Apartments, Akimats Delivered 5,700
The expected plan for the commissioning of credit housing in Kazakhstan is 10,000 apartments (0.7 million sq. m), of which akimats have delivered 5,700 apartments (457,000 sq. m), although funding has been provided to akimats at 165.1 billion tenge or 100% of the plan, reported Karagoyin.
A total of bonds worth 165.1 billion tenge have been purchased from 17 akimats, of which: 104.2 billion tenge from the National Fund of the Republic of Kazakhstan at 0.35%, and 60.9 billion tenge from the National Bank at 4.25%. Of the 165.1 billion tenge, akimats have utilized 74% or 121.5 billion tenge. The Atyrau, Mangistau, and East Kazakhstan regions declined funding in 2024.
Additionally, in July 2024, bonds worth 25 billion tenge were purchased from the akimat for financing the renovation of Astana.
To maintain the pace of social housing construction in 2025, Karagoyin suggested mixing already allocated funds from the National Bank at 8.74% and returnable funds from the National Fund at 0.35%:
“This will allow approximately 160 billion tenge to be directed to the regions through bond loans at a weighted average rate of 4.25% per annum,” added the head of Baiterek.
Overall, in 2024, the total amount of support for housing construction will amount to 640.3 billion tenge, according to his data.
In Astana, 16,000 families of troubled shareholders received apartments at the expense of taxpayers.
In the capital, 16,000 families of troubled shareholders received apartments through the assistance of the republican and local budgets, said Astana akim Zhenis Kasymbek.
“The second wave of troubled shareholders included 16,000 families and about 140 unfinished houses. Currently, three to four unfinished houses remain. (…) This problem has found its solution (…) at the expense of the republican and local budgets, troubled shareholders received their apartments,” said Kasymbek at a briefing last Friday.</