Kazakhstan’s real estate market is one of the most rapidly developing markets of the CIS countries

Kazakhstan’s real estate market is one of the most rapidly developing markets of the CIS countries

On the threshold of the "Investments. Construction. Development in Russia and CIS - Dealmakers Forum," we draw your attention to our news postings, in which we review the real estate markets of the CIS countries that are attractive for investors.

The focus today is on the market of the Republic of Kazakhstan, one of the indisputable leaders in terms of levels and rates of development among the CIS countries’ real estate markets. It is not the first year that foreign and Russian experts and investors will give a high assessment of the current economic development, investment climate and potential of the country. By 2010, Kazakhstan plans to double the GDP and raise it to $7,000 per capita, thus bringing it closer to the level of Eastern European countries. Already today Kazakhstan is the leader among CIS countries in terms of the volumes of direct foreign investments per capita, which is conditioned by several factors that are especially attractive for investors in this market.

A number of factors underlie the investment attractiveness of the Republic of Kazakhstan. Firstly, there is the long-term taxation policy (VAT is scheduled to go down from 15% to 12% in 2009, with improved social and income tax rates). Secondly, there is the natural and migrational increment of population, as well as people’s income growth, which is more rapid than in Russia. A great deal of attractiveness for Russian companies is provided by a related factor, the uniform language environment (currently, the Russian language, which has the status of official language in Kazakhstan, is spread 10% more widely among the population than is the Kazakh language).

Kazakhstan’s development rates are most fully reflected in figures. Kazakhstan exceeds other CIS countries in terms of direct foreign investments per capita. In 2006, the gross inflow of direct foreign investments amounted to $10437 billion up 58% from 2005. The volume of investments into capital assets in January-June of 2007 amounted to 1230.2 billion tenge ($10 million), which is 11.2% more than in January-June of 2006. The foreign trade turnover of Kazakhstanа in January-May of 2007 was $29338.1 million, an increase of 36.8% over January-May of 2006, including exports of $17503.8 million (28.3% up), and imports of $11834.3 million (51.7% up). By 2010 Kazakhstan plans to double the GDP and raise it to $7,000 per capita, thus bringing it closer to the level of Eastern European countries.

Today, in an environment of economic upsurge for Kazakhstan, the country’s construction industry is developing at accelerated rates. As of the beginning of 2007, 5,441 construction companies could be found in the Republic of Kazakhstan. As in Russia and other CIS countries, in Kazakhstan it is the real estate markets of large cities that develop at the most rapid rates. And in the first place, the market of Almaty, the former capital, has long been the financial, economic and cultural center of the Republic of Kazakhstan, and of the present-day capital Astana, rapidly developing Shymkent and the industrial Karaganda.

The possibilities to determine the segments of Kazakhstan’s real estate market that are the most attractive for investors, to identify the peculiarities of access to this market, and to open for oneself the experiences of companies already operating in this market will be provided to the participants of the forum "Investments. Construction. Development in Russia and CIS - Dealmakers Forum" to be held on April 23-24, 2008, in Moscow (Expocentre, Pavilion 7) within the framework of the exhibition “Investments. Construction. Property – 2008”. The organizer of the forum is RPI company. For more detailed information, see www.rpi-conferences.com.

The following sources were used in preparing this information: National Bank of the Republic of Kazakhstan, Committee of Customs Control of the Ministry of Finance of the Republic of Kazakhstan, Mall magazine.