Tackling Turkmenistan's Housing Shortage

Tackling Turkmenistan's Housing Shortage

Friday, 18 September, 2009
Analysts have welcomed a new housing construction programme in Turkmenistan, while adding as a note of caution – most people in the country cannot afford to buy the cheapest accommodation.

A September 9 cabinet meeting was told by Deputy Prime Minister Tuvakmammet Japarov that mortgage facilities had become much more widely available. A few days earlier, President Gurbanguly Berdymuhammedov ordered the construction of four-storey apartment blocks in urban areas across the country, to be paid for by would-be apartment owners taking out mortgages beforehand.

What is new about the plan is that local contractors are to be given the work, whereas previously only large state-run firms or foreign companies were given housing construction contracts. The use of mortgages as advance payment is also new – in the past funding was assigned from the central government budget.

The result of the old system, which was not based on demand, was a string of luxury multi-storey apartment blocks which stood empty because no one could afford the prices.

There is a risk, however, that the new homes in the purpose-built blocks could be almost as unaffordable.

“Only a very few people in Turkmenistan who have stable jobs and thus incomes will be able to afford such flats,” said an economist in the capital Ashgabat.

Currently, two-room apartments sell for an average cost of 35,000 US dollars, a large amount in a country where the average wage is about 210 dollars a month.

Other commentators are more optimistic, and predict long queues of buyers. They argue that allowing a range of companies a chance to bid for construction work will result in a lot of housing being built.

“Supply on the housing market will increase, sending house prices down,” said a man in Ashgabat who is considering buying a new flat himself.

He added that the government’s new lending scheme would also be good for consumers.

An estate agent agreed that the new housing would be in great demand.

“They are building one- and two-storey houses in Eneva [ten kilometers from Ashgabat], and these are selling very well, although they cost a lot more [than the planned apartments],” he said.

Annadurdy Khajiyev, a Turkmen economic analyst based in Bulgaria, warns that the construction scheme is limited in scope. He says the country needs a clear housing programme, based around the real needs and low purchasing power of the population.

“Those calculations haven’t been done,” he said.

Although there are no public statistics on demand for housing, some observers believe it runs into hundreds of thousands of people.

“A lot of houses get torn down, there are a lot of children being born, and many families who need their own housing,” said a media analyst in Ashgabat.

In 2007, President Berdymuhammedov approved plans for urban and rural regeneration, which led to many older housing blocks being torn down. Many of those evicted moved in with relatives, or had to make to with sharing an apartment with others.

“The number of people who live together with their parents, rent rooms or flats, or share temporary accommodation and hostels belonging to various ministries, is an indication of how many people are in need of housing,” said a commentator in Dashoguz in northern Turkmenistan.

(NBCentralAsia is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)

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