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Land and Building Prices Soar In Kazakhstan Last Updated 1/9/2008 |
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When we purchased this unfinished building in Sept 2004 for $40,000 we didn't know that land prices were about to skyrocket. 1 year later the land alone was worth between $120k to $160k. Byeram bought a house at the same time for $7,000 which is worth between $40-80k now. But he is not selling because it is slated to be destroyed for new buildings. He may get as much as $150k for it in 2 or 3 years.
Pictured Below: Left. Open fields near our home Kalkaman in 2003. Right: A new road is being built to connect Kalkaman directly to the city. This is the first time I have ever seen a new road built before the houses were built. An area about 3 miles by 4 miles has been developed with new houses since 2003. Only the main road of Kalkaman and a few of the dozens of side roads are paved. |
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Here are some of the factors that are driving up prices. 1) Mortgages have come to Kazakhstan for the first time. 2) Soviet period ill-gotten wealth was given amnesty. 3) Foreign and Government investment in land and apartments has soared. 4) The government is oil-rich. It is rebuilding the city center and paying 2-10 times the 2003 price to the owners. 5) The "suburbs" are literally just starting to be built here. Kalkaman is one of the fastest growing areas. |
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Below: The field at the end of our street in 2003. |
Below: Part of that field today. These houses start at $900,000. | |
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Below: The new gated subdivision on the left of the photo. Across the street to the right of the photo each house has a wall/fence. The next three photos show some shots of those types of houses. |
Even though these are suburban homes, most of the roads are unpaved even in the older areas of Kalkaman. Only the main road and the roads in the gated compounds are paved. | |
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The houses like the ones in the photos above start at $300,000. They are cheaper because they are not in a compound and don't have paved roads or gas. We don't know where this boom will end. Some people think that the market will crash in 3 years or so because of the increasing rate of mortgage defaults. In the mean time we are living right in the middle of the first suburbs in Kazakhstan. |
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