Kyrgyz citizens will now be able to save for an apartment faster. Despite the fact that the price index for residential real estate in the first half of 2023 increased by more than 25%, housing has become more affordable, thanks to the increase in average wages. This, in turn, has reduced the time needed to save money to buy a home.

The real estate price index, according to the National Bank of Kyrgyzstan, increased due to an increase in the cost of private homes by 41% and apartments — by 13.1% compared to last year. Thus, the average price per square meter of housing also increased. In Osh, for example, by 7.9% (to 54.2 thousand KGS), and in Bishkek — by 15.2% (to 74.7 thousand KGS) compared to last year. At the same time, prices for private houses increased even more significantly, so the average price of 1 square meter of private residential houses in Osh increased by 52.5% (to 103.1 thousand KGS), in Bishkek — by 35.1% (to 91.2 thousand KGS).

But, despite the price growth, the situation on the real estate market is becoming more favorable. This is due to the faster growth of the average monthly salary, which increased by 33.6%, offsetting the increase in prices for living space. For instance, to buy a 54-square-meter apartment, a family with at least two income earners would need to save 32 thousand KGS per month for 7.4 years, while a year ago it would take 10.4 years.

Under seemingly favorable conditions for buying a home, real estate transactions became less. Their number decreased by 9.1%, amounting to just over 25 thousand. This was mainly due to a decrease in sales transactions with apartments, by 14.6%, but transactions of houses yielded to the same indicator of 2022 by less than 1% (0.9%). As a result, there were 14 thousand transactions with apartments and 11 thousand with houses.
Continuing on the topic of decline, the volume of housing fund commissioning also decreased by 5.1%. This was particularly noticeable in Issyk-Kul (by 41.5%), Naryn (by 45%), Osh (by 23.8%) and Talas (by 19.4%) provinces, while other regions experienced growth.

In the lending sector, a mixed situation can also be observed. The number of loans issued for construction decreased by 24.7%, with a total amount of 2 billion KGS. However, mortgage loans amounted to 5.1 billion KGS, which is 4% more than last year. The share of construction and mortgage loans in the commercial banks’ loan portfolio amounted to 16.9%, (-1.5 percentage points).

In the sphere of lending, one can also notice a mixed situation. The number of issued loans for construction decreased by 24.7%, and their amount amounted to 2 billion KGS. However, mortgage loans amounted to 5.1 billion KGS, which is 4% more than last year. The share of construction and mortgage loans in the loan portfolio of commercial banks amounted to 16.9% (-1.5 percentage points).

An interesting fact: construction and commissioning of residential buildings were mainly financed by population, accounting for 85.2% of the total volume.