Almaty. July 25. KazTAG - Tulkin Tashimov. The rumors that slump of prices at the real-estate market have been fluttering among people lately. According to some experts, the price of a square meter in Almaty will get cheaper by $500 or even by $800. The reason for that might be in bankruptcy of some Kazakhstani banks and low oil price.
Let's try to analyze some factors, which might provoke the collapse or cause rise in price for real estate. The prices will go down at the real-estate market only in case the second tier banks are required to pay off the debts, and oil price will keep on falling until the end of 2012. In this case the banks will sell the pledges, destructing imaginary balance at the market between the demand and proposal. Otherwise, second tier banks will be able to wait for rise in real estate price until the end of time in order to get profit from the sold pledges.
Will life be enough?
It is interesting to know how many years people need to save money in order to buy an average house. The international experts have analyzed the real-estate markets of over 40 states of the world and made a rating of the regions, where a purchase of a flat or a house for local residents is just a dream, or oppositely a real opportunity.
First, we'll look at the rating of states with the most unaffordable real estate. Morocco is on the first place, where the average cost of housing makes $144 800, while the average annual profit of a family is $2 145, thus people have to save money for 67.5 years. Pakistan is on the second place ($74 953, $1.846 and 40.6 years), the third - Montenegro($151.155, $5.038, 30 years). Belarus is the fourth ($90 000, $3.203, 28.1 years), Russia is the fifth ($303.151 in Moscow, $64.102 in the regions, $11.615 in Moscow, $3.08 thousand in regions and 26.1 years).
Now let's look at the rating of states with the most affordable real estate. The US is on the first place, where people can buy a house after 2.7 years of work, Dominican Republic is on the second place (3.5 years), Chile - the third(4.05 years), Sweden - the fourth (4.2 years), Belgium - the fifth (4.3 years), Germany (4.4 years), Honduras (4.7) and others.
According to the research of KazRealt-Real Estate, the average cost of houses in Kazakhstan made up 26.335 mln tenge or $178 000 in June.
Which house is available in Almaty for this money? At krisha.kz site I found one announcement. A 4 roomed house, 100 sq.m. large in Bostandikskiy district with two separate entries, parking for 4 vehicles, warm floors in the kitchen and in the bathroom, gasification is expected this year. Quite modest and with infrastructure problems.
According to my own calculations, an average annual revenue of a family makes $7000-8000.. According to the statistics agency the average salary made up 97 568 tenge in April. If both parents work in a family, the average annual revenue in best case makes $16 000.
Thus, according to the official data, Almaty resident will have to save money for housing for over 22 years, according to the official data- 11 years.
Thus, it means that in the first case Kazakhstan will be ranked the 6th, while Almaty residents will be able to save money for housing faster than Moscow dwellers.
Rich people also cry
Rich people also suffer because of high prices for housing in Kazakhstan. According to the data of MAR Consult company, there was made top-10 list of the states describing the most expensive objects. The list was headed by Monaco, a house SEA SIDE PLAZA, where the apartment costs from $50 000 to €130 000 per 1 sq.m, then follows France (Boulevard de la Croisette, 104) with the cost varying within €34 500 to €40 500 per 1 sq.m. Spain(LAGUA DE BANUS) is on the fourth place with €7 000 to €13500 per 1 sq.m., Russia is the fifth (MILENIUM TOWER) from €6 000 to €15 500 per 1 sq.m., Great Britain is on the seventh place (Valance Gardens, 1), from €6500 to €11 000 per 1 sq.m.
Undoubtedly these elite houses have everything for comfortable living.
For comparison: the cost of 1 sq.m. in Astana is $5000-7000, Almaty - $4000-5000, Aktobe - $2 000.
It means that elite real estate in Astana and Almaty is on the same level as in Spain and Great Britain, and even a little bit more expensive than in Moscow.
The best of the best
Looking at the real-estate market in Astana and Almaty, it becomes clear that Kazakhstan is the best of the best. We have marked that an average house in Almaty costs $178 000. Meanwhile, a house on the coast of Florida(the US, sea, sun, palm trees) with a couple of bedrooms can cost $150 000-$160 000.
According to the newspaper "Komsomolskaya Pravda" it is possible to buy a house at the Bali for $30 000, ( 2 floors, 3 bedrooms, 2 bathrooms, a kitchen, a hall, a cabinet and etc), for $42 000 a studio-flat in Egyptin an elite complex in Hurghada opposite the sea. A flat in the central part of Western Berlin costs $62 000, 100 sq.m apartment in Greece- $89 000, $132 000 for a 2 rooms flat in Prague(Czech Republic), $162 000 for a villa in Turkey(170 sq.m), $167 000 for an apartment in Italy.
It means that a Kazakhstani citizen who gets money for selling his house in Almaty can spend it for 5 houses in Bali, almost 4 flats in Egypt, almost 3 flats in Berlin, almost 2 houses in Greece, a villa in Turkey and an apartment in Italy.
Nevertheless- cheating
Sharp turn from immature communism to spontaneous capitalism results in a big problem in Kazakhstan: everyone, or almost everyone, cheats here.
There is sense in it. For example, some people can buy a prestigious vehicle with platinum handles, have rest at the Coted-'Azur, become like Viktor Khrapunov, one of the richest people in Switzerland or construct a motordrom for $40 mln like Alidzhan Ibragimov.
Everyone knows that people have been cheating at the real mistake market. Some details were disclosed by Ablaikhan Samatdin, honorary president of the realtors' association of Kazakhstan. In his words, flats prices in Almaty are 40% higher the real ones.
His estimations are a bit shocking: in his opinion, the information about half of them (flats prices in the newspapers) is incorrect. His words that "we have analyzed all the sources that give announcements about the flats- almost 50% of them are non-existent" prove conspiracy of "black" real-estate agents against those who are going to buy housing.
In these terms, the information about increase of real-estate purchase-sale bargains in 2012 against 2011 is very doubtful. I may suppose that "black" real-estate agents under support of notaries sell the same real estate several times, artificially increasing the number of purchase-sale bargains. I think it is difficult to prove it, but taking in account dependence of notaries on the government (give or withdraw a license) it is possible.
It is made by the "black" real-estate agents to create an opinion among people: real-estate prices are growing, so it is necessary to buy urgently.
Tomorrow will be tomorrow
It's not excluded that Samatdin's estimations are understated. Perhaps, the prices are overestimated much more- by 50% and higher. At any case, housing prices in Kazakhstan are extremely high and not connected with the level of real profits of the population.
I should mark that my calculations were based on the earnings of Almaty dwellers, the richest people in Kazakhstan. If to refer to the earnings of rural people (excluding oilers), the figures may be very modest. Today forecasting collapse of real-estate market is like reading coffee grounds.
I should say the states with rich oil stocks can hardly withdraw from the strong inflation circle due to high concentration of liquidity per 1 sq.m. of territory and strong pressure on the economy. It fully concerns Kazakhstan where real-estate price correlates with oil prices. The correlation is direct here, "black oil" becomes cheaper- profits reduce, chances for real-estate purchase go down.
It is very probable: if oil price goes down, at least until the end of 2012, the prices will collapse at the real-estate market. But it will happen in case second tier banks are required to pay off their debts and they cannot refinance. In this case the banks will sell the pledged property, and the proposals at the market will go up.
If the banks are not concerned, they will keep the pledges in the reserves for a long time.