New residential developments in Kazakhstan fell in price by 10% over the month

Reduced activity in Kazakhstan’s real estate market is forcing developers to revise prices for economy-class apartments. In May, such properties became 10% cheaper, according to an AERC report. Prices for premium real estate also declined, while growth rates in the business and comfort segments slowed sharply.

How much housing costs in Kazakhstan

Primary market dynamics

On the primary market, housing prices decreased by 0.9%, according to Krisha.kz. Premium real estate lost 3% in value. In the comfort and business segments, a slight increase was recorded — 0.3% and 0.9%, respectively.

Uralsk led the decline, with prices falling by 5.6% over the month to 306,667 tenge ($640) per sq. m. In Shymkent, the average price dropped by 0.8% to 502,544 KZT ($1,050). In Astana, the price per square meter decreased by 0.2% to 614,366 KZT ($1,283). Against this backdrop, only Almaty stands out, where the average price increased by 2.3% to 877,397 tenge.

At the same time, Dilyara Seitnurova of the Qazaq Expert Club noted that primary housing in Kazakhstan became more expensive on average by 10–12%, depending on the project and the developer’s pricing policy, due to the introduction of VAT on new housing starting in January 2026.

Reasons for the decline in housing prices in Kazakhstan

The downward correction is driven by shrinking demand. In May 2026, only 30,420 property sale transactions were registered in the country — 10.5% lower than in the same month of 2025 and 13.5% less than in April.

Pressure on the market is also coming from the introduction of a unified 8.5% annual rate on interim loans from Otbasy Bank, as well as higher thresholds for early withdrawal of pension savings. These factors are limiting housing affordability for a significant share of the population.

Challenges for developers in Kazakhstan

Construction costs and base interest rate

Construction costs in Kazakhstan increased by 2.7% compared to April and by 8.2% compared to the same period in 2025. The sharpest rise — 13.6% — was recorded in the category of other works and expenses. At the same time, total sales in the first half of 2026 fell by 20%, putting additional pressure on developers.

In addition, the National Bank of Kazakhstan’s base rate remains high at 17% annually. Most developers rely on bank financing. The price per square meter is fixed at the loan approval stage, and developers often cannot lower it below the agreed level, as it affects project economics and obligations to lenders.

Construction Code

An additional burden on the market is the new Construction Code, which came into force on July 1, 2026. For buyers, it may be a positive development as it strengthens quality control and expands warranty obligations. For developers, however, it increases costs related to technical supervision, insurance, and risk management.

Outlook for Kazakhstan’s construction market

Companies expanding abroad

The chairman of the board of one of the largest developers, Aydin Rakhimbaev, stated that market difficulties have persisted for six months, making a quick recovery unlikely. Some companies are already entering foreign real estate markets, with Uzbekistan becoming a key destination due to growing sales in Tashkent, unlike Almaty.

Experts consider expansion abroad a logical step for companies but a potential risk for the national economy, as it may lead to capital, technology, and skilled labor outflows.

Alternative directions

Dilyara Seitnurova believes the construction sector can still find growth drivers within Kazakhstan, particularly in renovation and redevelopment of urban areas. Only in Almaty, there are more than 1,400 dilapidated and unsafe buildings.

Another tool is public–private partnership, which helps distribute risks between the state and businesses. This is especially important in a high-cost financing environment, where large urban projects are difficult to implement through either public or private capital alone.

Potential also exists in institutional rental housing, real estate funds, and installment-based programs. “If apartment sales slow down, completed housing does not have to remain idle,” the expert noted. “It can be transferred into rental stock through professional operators. As a result, developers receive stable cash flow, and cities gain a more structured rental market.”

Conclusion

Analysts at International Investment note that developers in Kazakhstan are currently relying on discounts for selected units, installment plans, mortgage subsidies, and participation in government programs. The future dynamics will depend on inflation and decisions by the National Bank. A rapid reduction in the base rate remains unlikely.

This means market mortgage rates are expected to remain high for at least several more months. As a result, no major structural changes in Kazakhstan’s real estate market are expected in the near term, while further price declines in new housing remain possible.

Kazakhstan’s real estate market appears only moderately attractive for investors. High interest rates, declining demand, and uneven price dynamics reduce the potential for rapid returns. Interest remains in select projects with strong fundamentals and stable demand, but the market as a whole does not currently offer conditions for broad investment growth.