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Housing construction in Kazakhstan in 2020: Trends and features

Monday, 08 February 2021, 23:55:50

Despite the pandemic, a decline in business activity and a reduction in costs, in 2020 the construction industry formed the basis of economic activity in Kazakhstan. The industry grew by 11.2%. The volume of commissioned housing increased by 16.8% and amounted to 15.3 million m². In the review, we talk about the development of the housing construction industry in Kazakhstan in 2020.

At the end of 2020, 15.3 million m2 of housing were commissioned from all sources of funding, which is 16.8% higher than the results of 2019.

The leaders in housing commissioning are Nur-Sultan and Shymkent, Karaganda, North Kazakhstan and Zhambyl regions.

In Almaty, Aktobe, Atyrau, Kyzylorda, Turkistan, Zhambyl regions, individual development of territories prevails.

In general, summing up the results of 2020, the regions have achieved the volumes of housing commissioning, as well as the development of the allocated funds for housing construction.

Despite the pandemic, a decrease in business activity and a reduction in costs, construction is one of the leading positions in terms of growth rates of economic sectors.

The issues of increasing the volume of construction and improving the housing infrastructure are under the special control of the Government.

The volume of construction work was provided mainly through the implementation of infrastructure projects within the State Program of Industrial and Innovative Development, Nurly Zhol, Nurly Zher, tourism development and other areas of the economy.

In order to support the construction industry in a state of emergency, 1 trillion tenge was allocated for the implementation of projects within the framework of the Employment Roadmap and the Economy of Simple Things program, small and medium-sized manufacturers received tax benefits.

In addition, 390 billion tenge was allocated for the implementation of the Shanyrak pilot project, of which 180 billion tenge were allocated for the construction of social credit housing and 210 billion tenge — for concessional lending through the Housing Construction Savings Bank under the 5-10-20 terms.

 

Main trends in development of housing construction in Kazakhstan in 2020

In 2020, the construction of communal housing for social strata of the population, the implementation of a mechanism for financing the construction of credit housing for the middle class with mortgage, guarantee and housing savings tools continued.

The achievement of indicators for the commissioning of housing was facilitated by the adopted programs for housing construction and reforms in housing policy, carried out taking into account the socio-economic development of the country, the strategic initiatives of the Elbasy and the Head of State.

 

Effective use of private investment in housing construction

The most important tools for providing the population with housing are attracting private investment in housing construction and stimulating public-private partnerships.

These measures ensured the effective use of investments: for 1 tenge of public investment, 4-6 tenge of private investment are attracted.

For 12 months of 2020, 2 trillion tenge of investments were allocated for all sources of financing for housing construction, or 133.6% compared to the same period in 2019.

Including within the framework of the Nurly Zher state program, 751 billion tenge was allocated from the state budget for the development of housing policy in 2020.

Within the framework of state investments, 2 million square meters of social housing were commissioned. Over 40 thousand families are covered by state support through the provision of more than 25 thousand affordable credit housing, 6 thousand soft loans and over 9 thousand families are provided with social rental housing.

 

7-20-25 program: Results for 2020

At present, the housing market presents various mortgage programs, developed and taking into account the capabilities of various categories of citizens. These programs differ both in the target range and in the economic model of implementation.

In order to ensure consumer demand of the population, on behalf of the Elbasy, by the resolution of the Board of the National Bank, the program of mortgage housing lending 7-20-25. New opportunities for purchasing housing for every family.

The program provides working citizens of the country with the opportunity to solve their housing issues and offers a mortgage housing loan at a historically minimum interest rate of 7% per annum, with an initial payment of 20% of the value of the loaned housing, with a loan term of up to 25 years.

As of Jan. 1, 2020, 47,851 applications for loans for a total amount of more than 560.6 billion tenge were submitted from the population, 27,353 loans were approved for issuance for an amount of more than 321.5 billion tenge.

 

Rent housing without redemption for most socially vulnerable segments of population

By the end of 12 months of 2020, according to preliminary data for socially vulnerable categories of people on the waiting list of akimats, 3.8 thousand non-redeemable rental apartments (or 191.1 thousand sq. m.)

As part of the instructions of Elbasy, given in 2019 at the XVIII Congress of the Nur Otan party, the provision of housing to low-income large families continued. According to the results of 12 months of 2020, 4.7 thousand apartments (or 318.8 thousand square meters) were built and purchased. In addition, due to the involvement of various sources, more than 4 thousand large families have been provided with housing.

 

Measures to resolve housing issues of working youth

As part of the instructions of the Head of State given during the Year of Youth, measures were taken to resolve housing issues of working youth in the cities of Nur-Sultan, Almaty and Shymkent.

In 2019-2021, it is planned to provide rental housing for 9 thousand citizens of the younger generation under the age of 29, who, living in these apartments for a 5-year period, will be able to accumulate funds for their own housing through the housing construction savings system.

According to preliminary data, in 2020, 1,031 apartments for working youth were built and bought out in large metropolitan areas of the country (in 2019, such housing was provided to 3 thousand participants).

 

More than 2 thousand Kazakhstani military personnel received loans for the purchase of housing

In 2020, under the Military Product program, 2,362 Kazakh military personnel and employees of special agencies, recipients of housing payments, received loans from Otbasy Bank for a total of 51.8 billion tenge. Of these, 1,888 made an initial payment of 15% and received a housing loan at 8% per annum. Another 474 military personnel have accumulated 50% of the amount of housing on their account and received a housing loan at 6% per annum. Loan term — up to 25 years. Loans under the Military Product program can be obtained for the purpose of acquiring primary or secondary housing, including under an equity participation agreement.

 

Over 4 thousand loans issued under 5-10-25 program

For lending to the participants of the Shanyrak pilot project, JSC NMH Baiterek allocates JSC Otbasy Bank for Housing Construction Savings 210 billion tenge within the framework of a bonded loan received from the National Bank of the Republic of Kazakhstan.

As of Feb. 2, 2020, Otbasy Bank JSC allocated 90 billion tenge, of which 70 billion tenge was spent and 6,095 loans were issued. 6,396 applications for the amount of 84 billion tenge are in progress, of which 6,280 applications for the amount of 82.4 billion tenge have been approved.

The remaining 120 billion tenge is planned to be allocated by the National Bank in January 2021.

 

How many Kazakhstanis currently queuing for housing?

As of Jan. 1, 2021, more than 548 thousand citizens are in the queue in the Unified National System of Registration of People on Waiting Forces in the Republic, the number of those who received housing from the municipal housing stock is about 40 thousand citizens.

In the future, the current base of waiting lists of akimats is transferred to the created Otbasy Bank, which will centrally maintain, register and record all those in need of housing, as well as the distribution of housing by date of staging in accordance with the staircase of housing affordability.

The distribution of housing will be carried out depending on the regional volume of housing commissioned, taking into account the date (year) of registration of citizens and the level of their income, which will satisfy the demand among the majority of those on the waiting list.

 

Unified national system for registering people on the waiting list

Through the Unified National System for registering, complete information on people on the waiting list is determined, which makes it possible to ensure transparency, centralization, optimization and automation of the processes of registration, removal from the register, and inventory.

The system is integrated with 22 information systems of state bodies (ADGS, MF, MLSPP, MH, MJ, MCRIAP, State Corporation and JSC HCSB) and has reliable information on the need for housing and the income of those on the waiting list.

Since the beginning of the implementation of the system, the inventory, when checking all the data on the waiting list, revealed more than 1 million inconsistencies (on average, 4-5 people in each family), revealed the facts of housing availability, the excess of the income level, the inconsistency of the waiting list category.

 

Pace of individual housing construction in Kazakhstan?

Within the framework of the Nurly Zher state program, in order to stimulate the development of individual housing construction, local executive bodies envisage:

  • the distribution of standard projects for the construction of individual, including low-rise residential buildings (these projects are provided to citizens free of charge);
  • allocation of areas for individual housing construction in accordance with the approved master plans and detailed planning projects;
  • provision of sites for infrastructure before the start of construction of residential buildings;
  • provision of land plots in the manner prescribed by law.

It also provides for the annual allocation of funds for bringing infrastructure to areas of mass housing development, including the development of 40 thousand land plots allocated to citizens for individual housing construction.

When forming the budget for 2021-2023 for 2021, 83.1 billion tenge is provided, of which more than 46 billion tenge (or more than 55%) are directed to provide infrastructure to individual housing construction.

It is envisaged that akimats organize pilot projects for the construction of low-rise buildings for those on the waiting list for obtaining a land plot for individual housing construction in a single architectural style, including with the involvement of private developers (726 residential buildings were sold in 7 regions). This is one of the mechanisms of public-private partnership.

In addition, subsidies are allocated annually from the republican budget to reimburse 7% per annum of the interest rate on loans to developers.

In turn, the Ministry of Agriculture of the Republic of Kazakhstan is working on the introduction of the service "Register of people on the waiting list for obtaining a land plot for individual housing construction’’ in the existing automated information system of the state land cadastre.

At present, the technical requirements have been approved, and the Register service has been demonstrated. A pilot project was launched in the Kyzylzhar district of the North Kazakhstan region to enter the existing applications into the Register.

After the implementation of the Register, the authorized bodies for land relations of akimats will enter the existing waiting lists by means of an electronic digital signature.

In this regard, the Roadmap was approved for entering the available data of applicants, for obtaining land plots for individual housing construction in the Register of people on the waiting list for obtaining land plots for individual housing construction.

After filling in the data of the Register in April, applications for obtaining a land plot for individual housing construction will be submitted through the e-government portal.

Also the plan of legislative work for 2021 (the deadline for submitting the Bill to the Majilis of the Parliament of the Republic of Kazakhstan is June 2021) The Bill "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on the Development of Land Relations" has been developed and proposed. An increase in free sites with the supplied infrastructure for the provision of land plots for individual housing construction, which will provide the largest part of the population with residential buildings and significantly reduce the queue for obtaining a land plot for individual housing construction.

 

Digitalization of construction industry

One of the tools in enhancing the transparency of construction processes and tightening control over the quality of construction of objects is the implementation of the project (unified information system) E-Kurylys.

By introducing a unified system, it is planned to significantly reduce paperwork by generating the necessary executive technical documents directly in the system without the possibility of further adjustments, which will also increase the transparency of construction processes.

The system covers all stages of construction — from the pit to the completion of construction. All hidden works will not only be completed with acts, but also stored in photo and video format.

If necessary, this system will allow connecting bodies of social protection of the population, fire fighting, sanitary and epidemiological services and other interested bodies.

At the same time, as part of the implementation of a unified system for organizing construction on the principle of "one window", the submission of monthly technical supervision reports has been automated.

This is a single platform for submitting reports by technical supervision, which allows you to track technical supervision by objects of their labor activity and suppress the facts of rendering services in different regions of the country.

Today all regions are connected to this system. Reports are submitted electronically, the process is centralized.

Further, the Registers (engineers, experts, technical survey, accredited expert organizations), the base of received notifications will be sequentially integrated, and within the reporting framework, discrepancies will be automatically highlighted, which will allow timely tracking of deadlines.

Also, at the moment, the regulatory and technical part is being worked out on tracking the use of domestic goods at the sites according to reports.

In addition, in order to introduce a unified system, the Minister of Industry and Infrastructure Development approved the Rules defining the procedure for maintaining the portal and information systems for organizing construction on the principle of one window.

In general, measures to strengthen government control and toughen construction requirements are systematically taken, including using digital tools.

This issue is under constant control.

Also in 2021, it is planned to create a Unified Register of Licensees, which will be integrated with the information systems of other state bodies to obtain information about each licensee (experience and work experience, commissioned facilities, independently and as a subcontractor, material and technical equipment, qualified personnel, availability of tax payments, etc.).

This will allow identifying inactive organizations (technical supervision, technical inspection and licensees) and improve the quality of construction products.

In addition, within the framework of the Action Plan for the implementation of Building Information Modeling technology (BIM-technologies) in the construction industry of the Republic of Kazakhstan (approved by order of the Minister for Investment and Development of the Republic of Kazakhstan No. 197 dated April 11, 2017, hereinafter — the Action Plan), TIMSO (BIM- technology).

Also, in accordance with clause 8 of the Action Plan, digitization of AGSK-1.1 “Normative legal acts and normative technical documents” (hereinafter — AGSK-1.1) is provided.

Digitization involves the implementation of work on the translation of paper regulatory requirements of the regulatory legal acts and NTD AGSK 1.1 into digital format in order to subsequently create algorithms for automated checks, which will solve the problem of timely detection of errors caused by the human factor, and in the future will create conditions for automating checks and examination of information models.

As part of the digitization of AGSK 1.1, it is planned to form a digital thesaurus this year, in which all construction concepts that appear in the architectural and urban planning catalog will be uniquely interpreted. After that, on the basis of the formed thesaurus, about 500 basic documents, including in the period 2021-2023. 195 documents will be gradually transferred to the format of automated checks. That is, based on the results of this work, it is assumed that information digital models of each construction object will be automatically checked for the requirements of technical safety of design solutions, which accordingly will minimize the risk of various types of accidents, will automate the work of experts of various types of expertise and, accordingly, will positively affect the quality projects and calculation of their cost.

Thus, in 2021-2022. it is planned to gradually implement measures for the "digitization" of documents included in AGSK 1.1:

"digitization of the segment" AGSK-1.1 (a set of regulatory documents and NTD), which is aimed at translating text requirements into the format of automated checks and includes work on:

  • removal of semantic ambiguity (syntactic deviation) of the text of regulatory legal acts and NTD;
  • markup of the text of regulatory legal acts and NTD in order to identify requirements;
  • formalization of requirements of normative legal acts / NTD and formation of rules;
  • organization of work of an expert group (experts in the field of construction), involved in order to check and eliminate errors (collisions);
  • translation of these rules into the format of automated checks.

In 2020, within the framework of the contract, work was performed in the amount of 237,839 thousand tenge, 100% of the development of budgetary funds.

 

Plans and objectives for 2021

This year, it is planned to introduce 17 million square meters of housing, the volume of investments will amount to 2.2 trillion tenge.

In 2021, within the framework of the Nurly Zher state program, it is planned to ensure the commissioning of 15.2 million m2 of housing from all sources of financing, of which more than 12 thousand social rental housing, more than 10 thousand affordable credit housing and 8.8 thousand soft loans for the purchase of housing.

In order to increase entrepreneurial activity in construction, it is planned to improve regulatory regulation, introduce digitalization of construction processes, BIM technologies, develop new regulatory technical documents taking into account modern technologies, standard project documentation, develop urban planning, cadastre and production of building materials.

In pursuance of the instructions of the Head of State Kassym-Jomart Tokayev, further measures for the development of housing policy are being worked out.

From 2021, on behalf of the Head of State, a full-fledged development and support institution will be launched — Otbasy Bank Housing Construction Savings Bank JSC.

In the future, the current base of waiting lists of akimats is transferred to the created Otbasy Bank, which will centrally maintain, register and record all those in need of housing, as well as the distribution of housing by date of staging in accordance with the staircase of housing affordability.

This will be the Housing Center for the provision of affordable housing, concessional lending, the use of housing certificates and pension savings.

The distribution of housing will be carried out depending on the regional volume of housing commissioned, taking into account the date (year) of registration of citizens and the level of their income.

This will meet the demand among the majority of those on the waiting list, of which, as of Jan. 1, 2021, there are 548,168 citizens.

In addition, according to the instructions of the Head of State Tokayev, the data in the Address to the people of Kazakhstan on Sep. 1, 2020, in addition, in order to increase the coverage of the state measure of support for citizens, mechanisms are being developed to subsidize rent for housing rented in private housing, as well as to stimulate the construction of housing in rural areas by private developers.

Also, in order to increase the volume of housing commissioning and proposals for the population, the issue of introducing off-take contracts is being considered, under which construction companies will carry out construction on order for those on the waiting list.

At the same time, the Ministry of Industry and Infrastructure Development in the framework of the execution of the instruction of President Tokayev on the introduction of a new package of proposals for improving the housing policy, plans to develop a new mechanism for housing construction with the attraction of private investment in the construction of rental housing. Within the framework of this mechanism, decisions on the creation of Private Construction Funds will be considered.

The implementation of these measures will be carried out within the framework of the Nurly Zher program after amendments are made to the current legislation.

It is also proposed to increase the volume of construction of credit housing and continue the project 5-10-20 (issuance of soft loans up to 5% per annum through Otbasy Bank for those on the waiting list). This requires an annual allocation of 420 billion tenge from the republican budget through Otbasy Bank. This will allow private developers and akimats to build 35,000 apartments annually at fixed prices. Through this mechanism, support will cover 353 thousand people on the waiting list (over 10 years) with incomes above 1 living wage.


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