President of Kyrgyzstan Sadyr Japarov emphasized in an interview with Kabar news agency that the State Mortgage Company’s policy is aimed at providing citizens with affordable housing. He noted that previously, state mortgage loans were provided through commercial banks, which led to a housing shortage and rising prices, making it inaccessible to the majority.
The head of state explained that the State Mortgage Company (SMC) itself does not engage in construction, otherwise this would lead to ineffective management or even bankruptcy.
«Construction is a complex process with many nuances. Therefore, we have prohibited the SMC from engaging in construction. An exception is possible only within the framework of a public-private partnership, but even then, all responsibility for completing the construction falls on the private company.
The SMC enters into contracts with the state company Kyrgyzstroyservice and private firms, fixing the cost and obliging them to commission housing key ready. For example, in Chui region and Bishkek, the cost of construction of 1 square meter is $650. In the regions — Talas, Naryn, Issyk-Kul, Osh, Jalal-Abad and Batken — the price is slightly higher, $700 per square meter. The difference of $50 is due to the transportation of building materials that are brought from the capital,» he said.
Sadyr Japarov noted that large private construction companies refused to work at this cost, so construction is carried out through Kyrgyzkurulush state-owned company.
«In addition, we managed to attract two or three private companies that agreed to take on the construction. After all, large developers refused, stating that they cannot build «key ready» at a price lower than $1,000 per square meter. Construction is carried out in the country on a massive scale. If private construction companies are ready to build at the aforementioned prices per square meter, then come to the SMC. We are ready to transfer the construction work.
Now I will explain why housing is sold to the population for more than this amount. For example, in the Muras microdistrict, apartments were sold to the population for $750 per square meter. Of this, $100 is the profit of the SMC. It must be, because the SMC will serve residents for 25 years — pay salaries to employees, take into account inflation, and so on. The SMC premium depends on the location of the buildings. For example, in Bishkek, in the «golden square», in prestigious areas, the price will, of course, be higher than $750,» he explained.
The President said: «Now I will focus on those, who pay half the cost of the apartment at once, and the second half — in installments for 15 years. This program does not apply to those on the waiting list. This is a separate program.
For example, housing construction begins from scratch on an empty site. These apartments are received by those who pay 50 percent of the cost in advance. The money contributed is again directed to the construction of the same apartments. Their cost depends on the location, as I have already said. But in any case, the price will be lower than that of private construction companies. For example, in prestigious areas of the city, private developers today sell a square meter without repairs (not key ready) for $2,000. And the SMC provides the same apartments to those who have paid half the cost, for $ 1,400 «key ready». For those in need, who are on the waiting list, the price will be even lower. Therefore, the SMC’s policy is a social policy aimed at providing ordinary citizens with housing.»
He noted that the SMC management system is completely digitalized.
«People on waiting list can track their position online. No one can jump the queue and stand in front. Financial control is also electronic. No one can steal money. I want to say to those who are on the waiting list: be patient. In the near future, the transfer of apartments will begin en masse. Then the queue will move not by five or ten places, but by thousands. In one day, thousands of people will receive apartments, and the queue will move forward,» Sadyr Japarov added.
He told that today the authorized capital of the SMC has reached $1 billion.
«By 2027, it will increase to $1.5 billion. This is an amount that previously seemed unattainable. After apartment buildings are built in small towns and regional centers, construction will move to rural areas. If someone wants to build a new house or renovate an old one, it will be demolished and new housing will be built. The term is 25-30 years,» the head of state concluded.
