Almaty's housing bubble wobbles as prices dip and sales stall
Column by Aset Kalymov
A real estate agent I know recently noted that Almaty's housing market is severely overheated: home and apartment prices are wildly inflated. In his view, this situation can't last forever. The expert predicts a drop in property prices in the coming months, likely by early summer.
Right now, according to the agent, the southern metropolis's housing market is stagnant: very few apartment sales are being closed, largely due to low purchasing power among the population.
The specialist argues that if someone sells their apartment now, rents for a while, and then buys back in after the market crashes, they could end up with a better place at a lower price. But in my opinion, that's a risky gamble—no one can guarantee it will pay off. That said, potential buyers might want to hold off on purchasing a roof over their heads. Maybe the forecast will come true…
Intrigued by the topic, I discovered that my acquaintance isn't alone—several other Almaty real estate agencies have recently warned of an impending collapse of the housing "bubble" in the city's property market.
Official data supports this trend. According to Kazakhstan's Bureau of National Statistics, February saw a decline in residential real estate transactions in 10 of the country's 20 regions. The slow season continues into March. One of the largest online property platforms reports that since the start of this year, the average price per square meter in Almaty has fallen by 3.7%—from 827,600 to 798,000 tenge.
Meanwhile, the new construction segment across Kazakhstan has risen in price by 16% over the past year and by 70% over the last five years. How can one not agree with the agent's assessment of an overheated market?
I recall the early 2000s, when Almaty experienced an unprecedented construction boom, with apartment prices surpassing those in some European countries. Then the financial crisis hit, another housing "bubble" burst, and prices plummeted.
I doubt we'll see a repeat of that scenario today—at least not in the primary market. A key factor driving up prices remains the rising cost of building materials. For example, a full turnkey renovation of a three-room, 70-square-meter apartment now runs roughly eight to eleven million tenge or more.
Another pressing issue is Almaty's surging population. Urban planners forecast that by 2040, the megacity will be home to 3.6 million people—a 50% increase over the current figure of 2.3 million. But will the city manage to build enough housing by then, given that even now it faces a severe shortage of land plots and worsening strains on municipal infrastructure?
Adding to the challenge, Lazzat Ibragimova, head of Otbasy Bank, recently told journalists that no drop in housing prices is expected. According to her, the current market conditions are driven by high demand, which in turn is tied to demographics. Kazakhstan experienced a baby boom in the late 1990s and early 2000s, and those children have now grown up, started families, and are actively entering the property market.
So it seems Almaty's "square" will remain golden—that is, out of reach for most—except on the secondary market for used apartments and houses, where prices have already begun to dip. Then again, only time will tell...
