The housing question: what to expect from the real estate market in 2025

Happiness in meters
Kazakhstanis have withdrawn about 80 billion tenge of pension funds for housing and medical treatment in the first month of 2025. In January, the amount of executed applications for housing improvement amounted to 48.4 billion tenge, the number of applications - 58.9 thousand units. Compared to December, the figures have dropped by about a third, but it seems that the boom in seizures, which has been going on for more than six months, has not stopped.
The context for this recent activity may have been the discussion launched in the summer about the introduction of restrictions on withdrawals in the future, followed by other proposals for changes in the pension system.

Analysts at AERC (Center for Applied Economics Research) analyzed housing prices in 2024 based on data from the Bureau of National Statistics and the website Krisha.kz . The average cost per square meter of new housing in Kazakhstan, according to official data, in December amounted to 500,198 tenge.

In December, new home prices increased by 0.2% (mom), and compared to December 2023, the increase was 3.0%. Astana is the region with the highest average price per square meter - 595,466 tenge. The least expensive region is Aktobe, where the average cost per square meter in a new building is 286,063 tenge.

The average price per square meter of new housing, according to Krisha ads.kz as of December 27, amounted to 454,782 tenge in the country. And the largest increase in prices for new housing was observed in the comfort (1.5%) and elite (1.1%) classes. At the same time, prices in the business and economy classes increased by only 0.03% and 0.74%, respectively.

The average cost per square meter in Astana increased from 436,647 to 436,893 tenge in December. In Almaty, the average price increased from 681,389 to 683,986 tenge per square meter. According to the data Krisha.kz The southern metropolis continues to occupy a leading position among the cities of the republic in terms of the average price per square meter.

And in Shymkent, the growth rate of the cost of new housing reached a negative value of -0.09%. The average price per square meter decreased from 432,984 to 432,580 tenge in December. A decrease in average prices for all housing classes was also recorded in Petropavlovsk and Taraz.

While in Aktobe, Karaganda, Kokshetau, Kyzylorda, Semey, Taldykorgan, Turkestan and Ekibastuz, the average price per square meter has remained unchanged since November.

Among the important developments for the housing market in Kazakhstan, AERC experts highlight the expansion of the possibilities of individual income tax deductions from January 1, 2025. They include the cost of paying interest on residential mortgage loans issued by any second-tier banks (STBs) and organizations engaged in certain types of banking operations.

Thus, the amount of taxes withheld from wages can be reduced if the employee has a mortgage loan in any STB. Prior to the changes, this option applied exclusively to loans issued by Otbasy Bank.
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The changes are aimed at increasing the availability of tax benefits to a wide range of borrowers, which in the long term may help stimulate mortgage lending and support the housing market," said Yerasyl Serikbai, senior analyst at AERC Consulting Services Department.
Growth factors
Nina Lukyanenko, Advisor to the President of the Self-Regulatory Association of Realtors of Kazakhstan, assessed the real estate market as stagnant last year.
"Yes, in general, the year showed an overall increase in the number of transactions by 17% compared to 2023, but it has not returned to the figures of 2022 - a decrease in the number of transactions by 7%.

As for prices per square meter, within a year the monthly index of growth /decrease in prices for new housing ranged from minus 0.4% per month (March) to a maximum increase of 1.6% (April). Secondary real estate changed in the same price range - from minus 1.2% to plus 1.8%," the expert notes.
She notes that buyers have become more demanding of the quality of construction, infrastructure, and planning.
"Leading construction companies are setting the trend for future facilities – the bigville format has appeared (a "city within a city" with its own social and commercial infrastructure, public spaces, residential quarters), projects with an increased comfort class have appeared in the elite segment, for example, options when the complex has an apartment class format, and where you can settle their guests.

As for the new residential complexes, the akims will determine the direction of urban development. Housing below class III will no longer be built in Almaty. This was stated by the mayor of the city Yerbolat Dosayev. This means that the requirements for the new facilities being designed are clear," the TAJ.report interlocutor continues.
The cost of housing, as before, will be affected by inflation, the dollar exchange rate, urbanization, population growth, and prices for building materials.

Nina Lukyanenko - Advisor to the President of the Self-Regulatory Association of Realtors of Kazakhstan
"And the main factor of influence is the economic policy of our country. Tax reforms have been actively discussed since the end of last year. They will show their effect on all segments of the economy, including those not related to real estate.

But concrete meters are a commodity. Expensive goods, but the same goods as bread, butter, milk, dress, boots. And if the reforms exert pressure, then prices will undoubtedly change," says Nina Lukyanenko.
What kind of beast?
How exactly the reforms will be implemented is still anyone's guess.
"If the topic of VAT cancellation for developers was discussed throughout 2024, and, as a result, price increases for this reason, then a new wave of discussions appeared the other day - an infrastructure tax of $ 40-60 per square meter.

So many years have passed since the moment of de-dollarization, some suggestions can be given. Why in dollars? Why per square meter, what kind of beast is an infrastructure tax?

Year after year, we answer questions about what needs to be done to increase housing affordability, talk about government assistance in bringing infrastructure to the complexes in order to support the developer and reduce costs, and eventually come up with such proposals," the expert states.
At the same time, the demand for housing will remain at a high level, the Adviser to the President of the Self-Regulatory Association of Realtors of Kazakhstan believes.
"There is a demand for apartments in any segment, because a roof over your head is a basic human need. The population is growing both due to migration and due to the high birth rate.

How this demand will affect prices will depend on how much demand is confirmed by solvency," notes Nina Lukyanenko.
We also asked her about the impact of mortgage programs, including preferential ones, on the market.
"Preferential lending programs at this stage are aimed at supporting certain groups of the population - those who purchase their first home, or groups of people who find it difficult to save up on their own.

Preferential mortgages are launched by individual developers together with banks to facilitate the buyer's path to their homes. We will continue to see such proposals in 2025.

The share of preferential programs is small, it covers only certain categories of the population, and therefore I cannot say that their impact on the market is noticeable," the industry expert shares his opinion.
According to the laws of supply and demand
AERC CEO Zhanybek Aigazin notes: real estate is the same investment product as investments in the stock market or a bank deposit.
"So this product is also subject to the law of supply and demand. Periodically occurring distortions in our market, in addition to the basic law of economics, are associated with financial repression, when the state intervenes in the market and begins to break the established market equilibrium in the "price of demand – price of supply" line.

This was the case during COVID-19, when the authorities created soft monetary conditions and fiscal momentum due to the possibility of withdrawing pension savings, and there was a boom in the housing market - prices increased by 40-60%. Naturally, this measure subsequently had a lag effect on inflation," says the economist.
He recalls that housing prices do not directly "sit" in the index of measurable inflation, but are deposited along the chain through intersectoral links for food and non-food products.
"What are my expectations for the real estate market in 2025? - Taking into account the fact that annual inflation in Kazakhstan in January 2025 was 8.9% (and the growth trend began in November-December 2024), it is not very good.

Inflation will be the main trigger this year. Pro-inflationary factors – external and internal – will influence price changes towards growth, including in the housing market," Aigazin believes.
In the domestic environment, the factors of influence, according to the economist, will be the continuation of the "Tariff in exchange for Investments" program and the release of fuel prices into free circulation.
"The second is more from the category of expectation that citizens will put into the cost of housing. Plus, the continued spending of budget funds through the state and quasi-public sectors will play a role due to fiscal incentives," the analyst clarifies.
What does financial repression lead to?
The external environment, in which experts also identify pro-inflationary factors, will also affect the real estate market.
"First of all, they are coming from the Russian side. We will continue to be influenced by two channels - foreign trade and ruble. The first is through price increases, the second is through exchange rate shocks in the form of sanctions, cutting off economic sectors from foreign markets.

In the Russian Federation, capital movement and access to foreign markets are prohibited, and any bad information hits the ruble, which hits the ruble-dollar bundle through the exchange rate, and then the dollar-tenge through the cross-rate. As a result, the depreciation of the ruble and tenge goes directly.

Secondly, Trump's rhetoric will have an impact. The combination of these factors will affect the real estate sector, where sellers and buyers operate in a market paradigm," says the head of AERC.