Purchase of housing in Kazakhstan is not an easy issue, so it is no coincidence that one of the most popular ways to purchase is participation in shared-construction. Read more in Tengri Life with a reference to Finprom.kz .

Reasons for popularity

According to experts, this method is popular due to a lower cost of housing, when compared with prices after the facility is put into operation, or on the secondary market.

For example, in the primary market in 2019, price of housing was on average of 293.5 thousand tenge per square meter, and in May 2023 — 486 thousand tenge per square meter (the difference is about 65 percent). In the secondary market, at the end of 2019, the price of square meter of housing was on average of 200.4 thousand tenge, and in May 2023 – 505.7 thousand tenge, that is 2.5 times more.

Perfect example

Let’s assume there is an ordinary family consisting of two working people (they receive two average salaries per month). They want to buy a standard apartment with an area of 54 square meters. If such a family can save a third of their total earnings for an apartment at once, then in order to accumulate 20 percent of the cost of an apartment (standard initial payment), it will take 1.9 years based on the cost of an average new housing and 2 years — in case of housing on the secondary market.

For comparison, in order to accumulate the full cost of apartment, it will take 9.6 years for new and 10 years for secondary housing.

Co-funding of construction – pitfalls

It is not surprising that the mechanism of con-funding of housing construction, where the cost of housing is up to 30% lower than the cost after commissioning, is considered in demand in our country. However, there are also pitfalls.

Couple of important points:

• In accordance with the Law “On co-funding of housing construction”, the sale of housing at the construction stage is allowed only through the conclusion of equity participation agreement in accordance with the approved standard form.
• The document is concluded in writing,  after signing, it must be registered with the local akimat through the Unified Information System of Equity Participation in Housing Construction “Kazreestr”.
• Upon registration, a corresponding statement is provided, which prevents the fact of a double sale and is the basis for payment.

It should be borne in mind that, If the buyer enters into another contract with the developer (provisional reservation agreement, investment agreement, assignment agreement), he/she is not considered a shared-construction participant and will not be able to protect his/her rights in a critical situation — for example, developer’s long delay, sale of one apartment to several people, etc. – to protect his/her rights as a shared-construction participant.

The conclusion of EPA and attraction of funds of shared-construction participant in accordance with the law are possible only if the developer has the appropriate permission from the local executive body or guarantees of Kazakhstan Housing Company JSC.

The developer shall present these documents to the potential shared-construction participant.

The Kazakhstan Housing Company’s guarantee is issued to the developer after a thorough reliability check: financial indicators, pricing policy, sources of financing, volumes and cost of construction are analyzed; permits and title documents are reviewed and check for absence of judicial or tax proceedings.

In case of developer’s default, the Kazakhstan Housing Company shall complete the construction of the facility and transfer the housing due to the shared-construction participant.

It is important to conclude an equity participation agreement in accordance with the requirements of the law, this can significantly protect the shared-construction participant from unscrupulous developers.

Unfortunately, to date, the issue of sale of shared-equity construction facilities without the appropriate permission and in violation of the law is still relevant.

Earlier, Kazakhstani experts in the field of real estate explained the current situation in the primary and secondary housing market, the current level of demand, will housing become cheaper, what difficulties developers have and what awaits the country’s construction sector in the coming months, see the link for details.

https://tengrinews.kz/profitably/uchastie-dolevom-stroitelstve-nujno-znat-kazahstantsam-504333/