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“Nurly Zher” Housing Construction Program

“Nurly Zher” Housing Construction Program (hereinafter referred to as a Program) was approved by the Government regulation of the Republic of Kazakhstan dd. December 31, 2016 No. 922, combining the new mechanisms of Housing Construction support and acting on the previously adopted state and branch programs: State program of “Nurly Zhol” infrastructure development for 2015-2019, the Program of regional development up to 2020.

The goal of the Program is to increase the availability of housing for people.

To achieve this goal, “NMH Baiterek” JSC (hereinafter - the Holding) takes part in the implementation of the following tasks (directions) of the Program through the subsidiaries of the Holding:

1. Increasing the availability of mortgage lending (task No. 1 of the Program). 
Since 2017 the subsidies will be allocated annually from the Republican budget in the amount of up to 7% per annum from the interest rates of mortgage housing loans that will be channeled through the financial agent of “IO “Kazakhstan Mortgage Company” JSC;

2. Promotion of housing construction by the private developers (task No. 2 of the Program). 
Since 2017 the subsidies will be allocated annually from the Republican budget in the amount of 7% per annum from the interest rates of developers’ credits that will be channeled through the financial agent of “PDF “Damu” JSC;

3. Construction of credit housing through the system of housing construction savings (Task No. 3 of the Program). 
"Zhilstroysberbank of Kazakhstan" JSC will be allocated 24 billion tenge annually for credit financing of investors since 2017 to ensure the turnover of funds allocated for construction of credit housing;

4. Providing with rental housing for people (Task No. 6 of the Program). 
In the framework of previously adopted state and government programs in 2017-2018 the construction of rental housing of “IO “Kazakhstan mortgage Company” JSC is in the process now.

5. Support of share housing construction (Task No. 7 of the Program). 
The implementation of mechanism for protection of deposits is carried out by “Fund of guaranteeing of housing construction” JSC.

Passport of the program

Program name

 

“Nurly Zher” Housing Construction Program

Basis for development

The forecast scheme of territorial-spatial development of the country up to 2020, approved by President Decree of the Republic of Kazakhstan dd. July 21, 2011 No. 118;

Paragraph 3.11 of the Protocol of enlarged meeting of the Government of the Republic of Kazakhstan dd. September 9, 2016 No. 01-7.8 (PE) with participation of President of the Republic of Kazakhstan;

The Letter of President of the Republic of Kazakhstan to people of Kazakhstan dd. November 11, 2014 “Nurly Zhol – pathway to future”.

Program developer Ministry of national economy of the Republic of Kazakhstan
Program goal Increasing the availability of housing for people.
Program tasks

Task 1. Increasing the availability of mortgage lending.

Task 2. Promotion of housing construction by the private developers.

Task 3. Construction of credit housing through the system of housing construction savings

Task 4. Creation of fund of rental housing for socially vulnerable populations.

Task 5. Development of individual housing construction.

Task 6. Providing with rental and commercial housing for people

Task 7. Support of share housing construction

Deadlines of implementation 2017 – 2021 
Target code Code name

2016

(assess-ment)

2017

2018

2019

2020

2021

Information source Responsible for achievement
The volume of housing implementation at the expense of all financing sources, thousand square meters*, including: 9619 10116 10530 10652 10694 10797 official statistics MNE, LEB of the regions, cities of Astana, Almaty,
“NMH “Baiterek” JSC,
FNB “Samruk-Kazyna” JSC.
block of housing 4825 5116 5130 5172 5204 5297
individual housing 4794 5000 5400 5480 5490 5500
*These codes are specified from the amount of financing for the relevant financial years.
Sources and amount of financing

The financial costs for the Program implementation are provided at the expense of national budget and private investments including quasi-public sector.
Amounts of financing of the Program are:

 

2017

2018

2019

2020

2021

Total
RB*, including: 168,8 182,0 174, 0 139,0 139,0 802,8
subsidies on mortgage housing loans 10,0 10,0 10,0 10,0 10,0 50,0
subsidies on developers’ loans 11,0 11,0 11,0     33,0
budget credit financing of Zhilstroysberbank of Kazakhstan 24,0 24,0 24,0 24,0 24,0 120,0
for increasing of charter capital of “NMH “Baiterek” JSC with subsequent increasing of charter capital of Fund of guaranteeing 10,0 0 0 0 0 10,0
Extrabudgetary funds** including: 0 277,0 89,0 283,2 89,5 738,7
Funds on bonded loans of the subjects of quasi-public sector.   277,0 83,1 277,0 83,1 720,2
lease rents of “IO “CIC” JSC for construction of credit housing by repurchasing of securities of LEB     5,9 6,2 6,4 18,5

* it is specified in the approval of the Republican budget for the relevant financial years in accordance with the legislation of the Republic of Kazakhstan;

** these funds are allocated for construction of credit housing through the repurchase of securities of LEB and distribution of stipulated deposits of “NMH “Baiterek” JSC in the Second-Tier Bank.

Iplementation of the program

Information on the progress of housing construction

under «Nurly Zher» Housing Construction Programme

as of September 19, 2017

 

 

JSC «Mortgage Organization «Kazakhstan Mortgage Company»

In 2015-2016 115 billion tenge were allocated from National Fund in order to finance construction and acquiring rental housing.

Additionally, 29.2 billion tenge were forwarded for construction, including funds previously received in 2013-2014 under «Affordable Housing 2020» programme and funds from budget credit worth 19.1, received in 2016 from Republican Budget.

Through of these funds the agreements were signed on construction and acquisition of 1054.7 m2, from which:

- for properties in 2015 with planned 401 thousand m2 425,5 thousand m2 were leased (7 234 apartments);

- for properties in 2016 with planned 326 thousand m2 328 thousand m2 were leased (5 993 apartments);

- for properties over 8 months of 2017 with planned 165 thousand m2 165.8 thousand m2 were leased (2 974 apartments) under the general contracted volume of 301.2 thousand m2 (5 427 apartments) were leased. The rest of the apartments will be leased in 2017 – 2018.

 

 

JSC «Baiterek Development»

In 2016, 113 billion tenge were allocated from National Fund for financing construction of rental housing.

Through these funds the agreements were signed worth 95.6 billion tenge for a total area of 588.7 thousand m2 (9 831 apartments), of which:

- for properties in 2016 with planned 124 thousand m2 128.5 thousand m2 were leased (2 036 apartments).

- for properties over 8 months of 2017 with planned 100 thousand m2 250.2 thousand m2 were leased (4 139 apartments). Additionally 139.5 thousand m2 (2 431 apartments) are planned for lease before the end of 2017, and 70.5 thousand m2 (1 225 apartments) in 2018 (1 225 apartments).

Drawdown plan, the State Commission for modernization of economy provides for the application of 51.4 billion tenge in 2016, and 61.6 billion tenge for 2017, from which 52.3 billion tenge have been disbursed in 2016. Thus, the drawdown plan for 2016 has been fully implemented.

As of today, property developers have received 81.7 billion tenge. Under the noncontracted 17.4 billion tenge the Management council of the National Fund has decided as of August 7, 2017 to redistribute noncontracted funds for redemption of bonds of local executive authorities in the 2 half of 2017.

Additionally, 67 billion tenge were allocated in 2016 for retirement of bonds of local executive bodies in order to finance construction of credit housing. Drawdown plan, approved by the State Commission for modernization of economy provides for the application of 38.2 billion tenge in 2016, and 28.8 billion tenge for 2017, from which 38.2 billion tenge have been used in 2016 to purchase bonds of the local executive bodies. Thus, the drawdown plan for 2016 has been fully implemented.

As of today, bonds of the local executive bodies have been redeemed for 66.9 billion tenge. The balance of 120.5 million tenge was formed due to cost savings based on the results of competitive procurements procedures in Akmola (100 million tenge), Almaty (15 million tenge) and Aktyubinsk regions (5.5 million tenge).

These funds will be transferred for additional retirement of securities in the 2 half of 2017.

 

 

Construction of EXPO facilities (76.1 billion tenge NFRK)

In 2014 – 2016, 76.1 billion tenge have been allocated by the National Fund.

For reference: Funded loan has been granted for 20 years under 0.15%. Repayment shall occur in 2036.

76.1 billion tenge or 100% of funds have been disbursed (additionally, 0.7 billion tenge are warranty bonds of the developers).

All properties have been leased and registered in 2016 (residential properties - 1 300 apartments and parking places with a total area of 98.5 thousand m2 for 39.9 billion tenge, shopping center with a total area of 138 thousand m2 for 36.3 billion tenge).

Residential properties are rented by HSC «NC «Astana Expo-2017» for the exhibitors until December 31, 2017.

For reference: JSC «BD» receives 200 million tenge for leasing until December 31, 2017.

 

 

Crediting depositors of JSC «Housing Construction Savings Bank of Kazakhstan»

In 2016, 22 billion tenge were allocated from National Fund for crediting of depositors of JSC «HCSBK».

Drawdown plan, approved by the State Commission for modernization of economy provides for the application of 2.9 billion tenge in 2016, and 19.1 billion tenge for 2017, from which 2.9 billion tenge have been allocated for signing loan agreements in 2016, or 100% from the plan 2016.

As of today, the loan agreements worth 9.1 billion tenge have been signed, the rest of the funds will be disbursed until the end of 2017, in accordance with the plan.

 

Mortgage subsidies through через JSC «KMC»

Through «Subsidizing rates of remuneration based on mortgages of the population» JSC АО «KMC» has been assigned as a financial operator that subsidizes up to 7% per annum from the mortgage rates within 10 years.

Subsidizing is performed only on mortgage loans, issued by the second-tier banks on interest rates that don’t exceed the base rate of the National Bank by more than 5%, active during subsidizing (current rate is 10.25% + 5%).

After subsidizing, the interest rate of the final borrower shall be 10% per annum. When lowering the base rate of the National Bank, the subsidy rates will decrease for newly granted loans.

Whereby, the loaner must provide the initial payment not less than 30% from the purchased housing on the primary market. Mortgage loans up to 20 million tenge in Astana and Almaty are subject to subsidizing, and up to 15 million tenge in other regions. Furthermore, the second-tier banks do not charge any commissions after acquiring subsidies from JSC «KMC».

In 2017, 10 billion tenge have been allocated from Republican Budget, allowing to subsidize mortgages of the second-tier banks for 120 billion tenge or 8 thousand loans.

For reference: The estimate of granting subsidized mortgages for 2017 is 1 thousand loans worth 15 billion tenge. Relevant amendments are added to Nurly Zher programme.

 

Currently JSC «BankCenterCredit», JSC «ATFBank», SB JSC «Sberbank» and JSC «VTB Bank» already take part in the programme and accept applications for receiving subsidized mortgages.

JSC «Nurbank» and JSC «Bank RBK» will also take part in the programme in near future.

The applications for subsidizing loans for development of individual housing construction are being accepted within the framework of ZSSB programme.

From the moment of launching the Programme KMC has received 381 applications worth 3.8 billion tenge from 16 regions (Almaty, Astana, Aktobe, Uralsk, Kostanay, Kokshetau, Ust-Kamenogorsk, Aktau, Atyrau, Semey, Taraz, Taldykorgan, Karaganda, Kyzylorda, Zhesgazgan, Almaty region), out of which 327 have been approved for 3.2 billion tenge.

Additionally, 3 second-tier banks (Tengri Bank, Tsesnabank and KASSA NOVA BANK) have confirmed their participation in the Programme, and their involvement is expected within the 2 half of 2017. However, the main problem of mortgage development in the country is the lack of long term funding in second-tier banks.

For reference: How to get a mortgage with subsidizing?

Step 1. Private individual shows documents to a second-tier bank in order to get mortgage loan for purchasing primary housing and the application for acquiring subsidies.

Step 2. In accordance with the procedure, established by the internal documents, the second-tier banks make an assessment of capacity to pay and mortgage security.

Step 3. In case of approval for granting, the bank puts forward an application to JSC «KMC» for granting subsidies within 3 working days.

Step 4. Within 5 working days JSC «KMC» examines the documents for compliance with the requirements of the Programme and makes a decision on subsidizing.

Step 5. Based on the decision second-tier bank and а borrower sign a bank loan agreement, payment schedule and mortgage contract.

 

 

 

 

 

Subsidizing credits of the developers through JSC «Damu»

Through «Subsidizing rates of remuneration based on loans of construction developers JSC «Damu» has been assigned as financial operator, subsidizing 7% per annum from the mortgage rates within 3 years.

Subsidizing is performed only on mortgage loans, issued by second-tier banks on interest rates that don’t exceed the base rate of the National Bank by more than 5%, active during subsidizing (current rate is 10.25% + 5%).

In 2017, 10.7 billion tenge have been allocated from the Republican Budget in order to subsidize loans of construction developers for 152 billion tenge. Through these funds, around 600 thousand m2 of property will be leased in 2018-2019.

Furthermore, up to 50% of housing, built under the Programme, will be proposed to the depositors of ZSSB on fixed value up to 260 thousand tenge in Almaty and Astana, and up to 220 thousand tenge in the regions.

Currently, Regional Coordination Council has made a decision to subsidize 7 construction projects with the amount of loan of 19.2 billion tenge in Astana, Aktobe, Atyrau, Almaty, Kostanay, of which subsidy agreements have been signed for 2 projects (9-story residential building «Sollers» LLP, 3.7 thousand m2 through Sberbank and construction of housing complex of "Altyn Shar West" LLP, 60.0 thousand m2 through JSC "Eurasian Bank").

5 more second-tier banks (BankCenterCredit, Halyk Bank, Nurbank, ATF Bank, Kazkommertsbank) have confirmed their participation in the Programme. In total, additional projects of construction companies with the loan amount around 25 billion tenge are being reviewed by the second-tier banks. However, the main problem of mortgage development in the country is the lack of long term funding in second-tier banks.

For reference: How can a construction developer receive loan with subsidies?

Step 1. Legal body shows documents to a second-tier bank in order to get a loan for the construction of housing and application for acquiring subsidies.

Step 2. In accordance with the procedure, established by the internal documents, the second-tier banks make an assessment of capacity to pay and mortgage security.

Step 3. In case of approval, private construction developer, second-tier bank sign and ZSSB sign a preliminary tripartite cooperation agreement, where they determine the cost of 1 sq. m and a number of depositors.

In doing so, private construction developer is obliged to propose not less than 50% of built housing to the ZSSB, where the price of implementation for 1 sq. m in Almaty and Astana is up to 260 thousand tenge, and up to 220 thousand tenge in other regions.

Step 4. Legal body applies for subsidies to Regional Coordination Council under akimats.

Step 5. Regional Coordination Council examines the documents for compliance with the requirements of the Programme and makes a decision on subsidizing.

Step 6. Based on the decision the second-tier bank, borrower and JSC «Damu» sign a bank loan agreement, payment schedule and mortgage contract.

Background information on the results of the implementation of the "Nurly Zher" program for 9 months of 2017

Background information on the results of the implementation of the "Nurly Zher" program for 9 months of 2017

Results of the implementation of the housing construction program Nurly Jer for 9 months of 2017Results of the implementation of the housing construction program Nurly Jer for 9 months of 2017

Results of the implementation of the housing construction program Nurly Jer for 9 months of 2017