He believes that mortgage housing remains more affordable than on the open market
At a meeting of the Jogorku Kenesh, President Sadyr Japarov responded to the criticism from deputies regarding the prices of housing offered by the State Mortgage Company.
According to him, even if the land is provided for free, the state cannot sell mortgage apartments at cost price. The mortgage company must function as a long-term and stable structure.
“If we provide housing without adding value, we will have to finance expenses from the budget every year. Ultimately, in 10–15 years, such a company will go bankrupt and will not be able to continue construction,” the president emphasized.
Japarov noted that the authorized capital of the State Mortgage Company has reached 2 billion dollars, and this year 400 million dollars from the National Bank's net profit have also been allocated for the development of the program. These funds are divided equally: 200 million dollars for the south and north of the country to complete current constructions and start new projects.
He added that about 4% of the company's expenses go to administrative needs.
An additional surcharge of 250–300 dollars per square meter was introduced to partially compensate for inflation over the past 25 years. Nevertheless, mortgage housing remains significantly cheaper than on the market.
“Private developers offer apartments for 2–3 thousand dollars per square meter in a state ready for PCO, while we build ‘turnkey’,” the president noted.
The state has set fixed prices for construction companies: 750 dollars per square meter in the regions (including about 50 dollars for the transportation of building materials) and 700 dollars in Bishkek.
Construction companies build houses and transfer them to the State Mortgage Company, which in turn sells housing to the population at a price of 950–1000 dollars per square meter with an installment plan for 25 years.
Additionally, the president commented on rumors that construction is solely handled by Kanibek Tumanbaev.
“They say that Tumanbaev builds and earns alone. If anyone has a construction company, come. I will allocate land. If you can build at this price, please do,” he stated.
According to the president, at the start of the program, the authorities gathered construction companies and offered them to build housing in Bishkek for 700 dollars per square meter “turnkey.” However, most developers refused.
“They laughed and claimed that it was impossible to build ‘turnkey’ for 700 dollars, asking for a minimum of 900–1000 dollars. Therefore, we had to organize the system ourselves and hire those companies that agreed to work at the established prices,” summarized Sadyr Japarov.
