06.05.2009

Trend on Improvement in the Real Estate

Sergei ABAKSHIN

The asymmetric forms of the period of «building boom» in Almaty have strengthened common inadequate situation in the country and society. Besides the negative fruits economic crisis has also brought positive moments in the sphere of the real estate. The unreal high prices for housing have started changing in the direction of balance with the income of bulk of population.

kazah-stroykaWhen the price of the apartment, which could not be sold in «raging ninetieth» at a price of ten thousand American dollars, steps over a mark in two hundred thousand American dollars (taking into consideration that the American dollar became cheaper), many things seem in other light. For example, the monthly salary in three thousand American dollars ceases to be perceived as something transcendental. But only small number of Almaty and Astana citizens could be praised with such salaries. As the result of such phantasmagoria the critical bulk of population showed up the strong de-motivation to work.

Actually the life was in full swing only in the segment of physical survival. The movement meant the life when it was necessary to pay rent for apartment and to feed the family. After the poverty line was a little bit behind, the phase of unhealthy stupor ensued. People's real wages was enough only to buy the provisions, to pay the rent, to buy the clothes, to go to the cinema and café. There was no point in working hard because of even the high salaries couldn't guarantee purchase of a new apartment during one's life-time. Do hope that this unhappy picture is from our yesterday life.

Purchase and sale of the real estate is the most powerful watershed between the inhabitants of big Kazakhstan cities. It was easier to overcome the «transport barrier» by buying the old second-hand car, but the situation with the purchase of a new or old apartment was completely different. The fact that over one hundred thousand citizens of Almaty (the actual population of a megalopolis comes up to 2 million inhabitants, and more than 1 million people live in its vicinities) directly or indirectly were engaged in the sphere of profiteering with the real estate should not lead astray. Only the small number of them could buy the apartment or the office under those prices.

Those who can buy an apartment, and those who can't do it, live as though in different planets. They completely differ in vital interests and sense of values, they have non-comparable levels of their income. The person with pocket money of one thousand American dollars doesn't understand the pensioner when she buys the bread at the baker's shop in five quarters far from her house only because of this bread is cheaper than at the nearest one. The gap (difference) between the income exists, but in the conditions of the megalopolis the people have to have various contacts and interaction. Social tension in such contact zones is particularly sharp.

The striking illustration of existence of two worlds became the increased segment of «glamour» magazines. The target audience of such magazines is interested in tendencies of world fashion, landscape design, changes in hierarchy of elite brands, forecast on prestigious resorts, but they are not interested in the growth of the tariffs on the electric power, rise in the cost «free-of-charge» education or quality of water-pipe water. When the average citizen reads such a magazine, this will cause his/her indignation, class envy and hatred.

At that period the embassy officials were as the distinctive «control group» and the «mirror of Kazakhstan reality», especially towards the local «elite». Many diplomats felt uncomfortably in such situation. On the one hand, there were the three-room apartments rented by diplomats at a price of private residence somewhere in Prague. On the other hand, the commissioner of the European commission with his month salary of 20 thousand EURO couldn't felt himself as a well-to-do person in comparison with the any Deputy Akim (Akim is a governor of area or the mayor of city). Also, the foreigners mocked at local private residences, where the three-stored buildings occupied almost all the area, not leaving a place for trees and lawns.

Through a prism of Almaty price «skews» (defects) the various messages from abroad seemed like a common things. For example, the information that the top-manager of a big western company has robed the shareholders on 20 millions American dollars reacted by the local readers as the cost of twenty apartments at the new residential areas. The event stirred up the advanced world had perceived as a common event in the republic.

Price advance of the real estate forces up all the concerning prices, from the cost of building materials and petrol up to cost of footwear and vegetables. Perhaps, only pay raise is more slow, than it could be expected. However, there is a long history system playing on delay of its growth. The system includes the pendulum migration of workers from suburbs, gastarbaiters and branch arrangements (collusions).

In the conditions of monopolization, corruption and expensive real estate a price level possible to start any business had regularly increased. At first, it became practically impossible (very costly) to conduct business at a separate building, and then the turn quickly has reached the commercial structures based on the ground floors of dwelling houses. In general, the amount which earlier was enough to sell successfully working small business, now became inadequate to start the new one.

The people who have saved up the amounts of 300-400 thousand of American dollars had to invest the money into the real estate, due to the lack of opportunity for application of their money in real sector, also because of absence of the share market, and consequently lack of opportunities to purchase the shares of the interested enterprises. Domestic corruption potentially capable to take any business away without justifiable (fair) compensation, also obliquely directed financial flows to the sphere of the real estate.
Unexpectedly rapid «blowing away» of «a building bubble» at once exposed all the socio economic problems and plagues. The deceived participants who went shares with the construction company (the building was bought at the stage of foundation pit) have appeared. One of them became the victims of the undisguised swindlers, the second became the victims of building «pyramids» (when the financial means of the new clients had used for constructing of the houses of the previous contractors), and the third ones suffered from the companies became unable to work in conditions of economic crisis.

The loss of job or part of earnings has highlighted extortionate percent (interest) of the credits under the mortgage given by some banks of the second level. There are the contracts with monthly return payment shared as follows: 95 % is made as compensation to bank and only 5 % is repayment of the sum of the basic debt. The nonpayment crisis has started, the actions of the social protest have been launched. Banks found themselves in a catastrophic situation with the threat of default despite of the fact of active state support.

The owners of the real estate not at once, but have reconciled that their property does not cost the former astronomical sums any more. The price to rent the apartment and the office slowly forces down. The market began to depart from the bygone «ecstasy» and moves to a point of balance. Even the average price of an apartment «includes» in a lot of average annual earnings of the average citizen, the hope to earn money to buy the new apartment already has returned.

4 comments

  1. Anonimaus

    Загадили Алма-Ату своими стройками

  2. Алматинес

    Бля, к осени все нахрен рухнет

  3. Люблю сообщения в таком духе! Премного благодарен :)

  4. Ого! Интересный поворот событий!