After devaluation of tenge housing sales increased in Kazakhstan

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The head of the Association of construction companies of Kazakhstan Aslan Tukiyev commented how free-floating exchange rate will affect the domestic real estate market.

"Right now, most construction companies try to sell the housing at the old exchange rate at the level - from 188 to 199 tenge per dollar. Of course, citizens, who needed to buy an apartment, are buying it at a profitable rate. Statistics shows that constriction companies that retained this exchange rate have managed to increase sales several times. Our customers are those who kept money in tenge, and also those who kept money in dollars. It is profitable for the first group as they keep the money, and for the second group, as they change dollars to tenge and, respectively, buy an apartment, managing to save money from the difference of the exchange rate. Therefore, the rise in sales is huge. How long it will last - is another question ", - said Aslan Tukiyev.

However, he doesn’t dare to make long-term forecasts. "Everything will depend on how the Government will implement the medium-term plan of support of the economy. We hope that we would include us, because otherwise there will be adverse effects. From the perspective of economic viability, it is profitable for the state to support those industries that are able to maintain GDP. These are industries that create added value with maximum local content. One of the major industries is construction", - said the head of the association.

According to A. Tukiev, in the construction industry there is a large percentage of local content. "In economy-class housing it sometimes reaches 90-95%, in projects of elite class - 75% or less. In the sector of the elite class there will be a price increase. About what kind of a price rise we are talking about? The rise of the costs, but not the price? Will it be adequately transferred to the price of a square meter - is the question of the market ", - he said and added that the cost of housing will rise, at least by 7-8% and a maximum by10-15%.

At the same time, the executive director of ACP stressed that he does not support the argument that the devaluation of the tenge "will not have an affect on the construction industry".

"As for us, the builders, what does devaluation mean? The decrease in market demand. For us this is a crucial point. Devaluation reduces the ability of citizens to buy housing. Structure of sales of real estate shows that there is no financial mechanisms to support this demand. For example, loans, as a form of purchase of apartments, from construction companies, is not more than 10%. That is 90% of apartments are bought for cash - in installments or by other mechanisms, proposed by the construction companies. But, in any case, this is the relationship between the buyer and the developer, without banks or other institutions", - he explained.

"We do not see the government support and we are very worried that there won’t be any, because we understand that the demand will decrease", - concluded Aslan Tukiyev.