Acquiring property is one of the three most popular investment strategies for Kazakhstanis. The vast majority of them would prefer to buy an apartment in one of the country’s big cities to lease it to tenants for a 25% interest rate per annum at least, according to a survey by United Research Technologies Group (URTG).
Almost one in three (27.4%) out of 1,600 respondents in Kazakhstan interviewed by URTG this spring consider investments in real estate as the most reliable way to save their money. However, only 41.1% of them have savings for such an investment. Furthermore, only one in nine is ready to keep their money in “bricks and mortar.” This is the third most popular method to keep one’s funds safe. The first one is in banking deposits (88.1%) and the second, is at home (36.1%). (Respondents were allowed to choose more than one option.)
Almost 83% of those who think about investing in real estate are interested in acquiring a property, while only 17% of potential buyers are interested in investing in offices, shops or other commercial properties.
Focus on local cities
The number of Kazakhstanis considering investments in the domestic real estate market is four times higher than those who are interested in properties abroad. Apartments in big cities in Kazakhstan are the most popular option for the first group of investors.
Almost half of respondents from all over the country (45.5%) would acquire housing in Astana. The highest rate of interest in real estate in the capital city is among local residents themselves (80.4% of interviewed people in the city), as well as people from the Abay (65.5%) and Akmola (64.2%) regions.
On the other hand, 41.8% of respondents are interested in housing in Almaty. These are mainly people already living in Almaty (84.9% of respondents) and residents of the neighboring Almaty (66.7%) and Zhetysu (63.3%) regions.
Some respondents (12.6%) thought about purchasing housing in Shymkent. These are residents of Shymkent themselves (72.3%) and respondents from the Turkestan (44.4%) and Ulytau (20%) regions.
The most popular investment strategy of those who are ready to put money into Kazakhstani real estate is leasing and resale of the housing once its price is higher than at the moment it was purchased. Two-thirds of respondents have chosen one or both strategies.
Investing in real estate abroad
The most popular foreign destinations for real estate investments among Kazakhstani respondents are Turkey, Europe and the UAE.
More than a third of the 1,600 Kazakhstanis interviewed under the survey would buy an apartment in Turkey if they had this opportunity. About a third would invest their financial resources in European countries like France (10%), Italy (9.7%) and Spain (9.6%), according to the survey by URTG. Another group of respondents (27.3%) would have chosen a property in the UAE, while Thailand and Cyprus are attractive investment locations for 9.8% of Kazakhstanis each.
Interestingly enough, the number of Kazakhstanis who would lease their hypothetical foreign property is twice as low as the number of those who would do so with their Kazakhstani housing. Half of respondents said they consider purchasing a property abroad as an effective tool to save their money and earn more once real estate prices surge in the future.
Appetite for investments
Almost one in three respondents in Kazakhstan would be happy to gain 25% in interest rate per annum in tenge. Another third of respondents agreed to earn 15% to 25% per annum, while 14.4% of those interviewed during the survey were ready to accept 10% to 15% per annum in return for their investments. Only one in ten would be okay with less than a 10% return on their investments per annum.
