Developers raise housing prices, pushing down mortgage demand

Demand for mortgages is decreasing in Kazakhstan. Bank representatives believe this is due to rising housing prices, as developers anticipate the introduction of a new tax code. Starting in 2026, construction companies will lose their current tax benefits and will be required to pay 16% VAT on each apartment sold.

In the first quarter of 2025, banks received 241,000 mortgage applications. The average loan amount fell by 7% to 16.6 million tenge ($32,596), while the approval rate declined by 7 percentage points to 24%, according to a survey of 19 Kazakhstani banks.

«As banks noted, the decline in demand for mortgages was driven by rising real estate prices, as developers anticipate changes in the country’s tax system,» the National Bank said in a statement.

In addition, the drop in demand may have been driven by the delayed payment of government housing savings premiums.

Meanwhile, some mid-sized banks have reported an increase in mortgage demand, partly because banks are now allowed to consider various income sources when evaluating a borrower’s application.

The growing interest may also be linked to developers’ efforts to sell apartments ahead of the new tax code’s implementation. In the second quarter, banks expect a slight increase in mortgage demand, although some are considering raising their interest rates.