Kazakhstan's Mortgage Boom Runs on State Support as Housing Becomes Harder to Afford

Cheaper mortgages, more expensive homes

Kazakhstan issued 2.36 trillion tenge in mortgages in 2025, up 16.7% from 2024, even as the National Bank raised its base interest rate to 18%. State support explains much of that apparent contradiction: preferential programs supplied 74% of new mortgage lending, according to the Association of Financiers of Kazakhstan, while the average rate on new loans fell to 9.8%.

For households able to enter those programs, cheaper borrowing helped keep home ownership within reach. For many others, rising property prices, falling incomes after inflation and stricter lending decisions made buying a home harder. The association recorded an approval rate of just 25.2%, down from 39.2% a year earlier.

The Kazakhstan Sustainability Fund's 2025 mortgage market report puts outstanding mortgages at 6.952 trillion tenge on January 1, 2026. Otbasy Bank, the state housing finance institution, held 4.05 trillion tenge, or 58.3% of that total. Its position makes government policy central to both the availability of housing loans and the direction of demand.

The central problem is simple: a cheaper loan lets a buyer spend more, but it does not immediately create another apartment. Where construction cannot keep pace, some of the benefit intended for borrowers can flow into higher property prices.

Kazakhstan now faces two connected pressures. Commercial mortgages have become difficult for many families to afford, increasing demand for subsidized alternatives. Those alternatives keep purchases moving, but they also support prices in a market where access to suitable housing remains uneven.

How much of the market depends on support?

The Association of Financiers of Kazakhstan's annual mortgage review says Otbasy Bank programs and the 7-20-25 scheme accounted for 74% of new lending in 2025, up from 69% in 2024. Commercial bank products fell from 31% to 26%.

Halyk Finance's analysis of the National Bank's financial stability findings gives a different breakdown: preferential mortgages represented about 71% of new lending during 2025 and 73% of outstanding mortgage balances at the beginning of 2026. It puts growth in preferential lending at 26.2%, against a 1.4% decline in lending on market terms. The two assessments use different groupings of preferential lending.

The association says Otbasy Bank supplied the entire increase in new mortgage lending. Its issuance rose 27.5%, from approximately 1.3 trillion to 1.6 trillion tenge. Its housing savings customer base also expanded, with an additional 420,000 depositors and contracts.

Earlier figures show the same direction. Preferential programs accounted for 67% of disbursements in the first nine months of 2025, compared with 61% during the same period in 2024. Banks issued 2.1 trillion tenge from January through November, before the full year total reached 2.36 trillion.

Why mortgage rates fell while the base rate rose

The National Bank increased its base rate by a cumulative 3.75 percentage points between December 2024 and October 2025, taking it to 18%. The base rate helps influence the cost of money across the economy. Raising it generally makes borrowing more expensive and restrains spending to reduce inflation.

Subsidized mortgages follow a different route. Government programs and housing savings mechanisms allow eligible borrowers to obtain financing at rates less closely tied to current commercial funding costs. As those products take a larger share of lending, the market's average mortgage rate can fall even when ordinary borrowing becomes more expensive.

The Sustainability Fund and the financiers association put the average rate on mortgages issued in 2025 at 9.8%, down from 10.9% in 2024. Halyk Finance cites a year end weighted mortgage rate of 10.5%. Those figures cover different measures and periods; the annual average for new lending was 8.2 percentage points below the 18% base rate.

Inflation reached 12.3% in 2025. The association describes a market pulled in opposite directions: monetary tightening restricted commercial credit, while preferential financing continued to encourage housing purchases.

Commercial lenders face expensive funding

Commercial banks must cover the cost of obtaining money, running their business and accepting the risk that some borrowers will not repay. The Sustainability Fund describes commercial mortgage lending at the end of 2025 as facing a liquidity crisis because funding had become expensive.

A regulatory ceiling also shaped lending decisions. Joint resolutions adopted by the financial market regulator and the National Bank in August 2024 provided for the maximum effective annual mortgage rate to fall from 25% to 20%. Implementation of the lower ceiling was postponed until July 1, 2026.

The effective annual rate includes borrowing costs beyond the headline interest rate, making it useful for comparing loans. Keeping that ceiling close to banks' funding costs can reduce the room available to cover expenses and risk. Some lenders responded by suspending mortgages for existing homes, revising terms or moving toward state supported financing for new buildings.

The policy sequence helps explain the shift:

• August 2024: regulators adopted joint resolutions setting limits on effective annual lending rates, including a planned 20% mortgage ceiling.
• October 2025: the base rate reached 18%, increasing pressure on commercial mortgage funding.
• November 2025 to July 1, 2026: the reduction in the mortgage ceiling was postponed, leaving the 25% limit in place during the suspension.
• January 2026: the National Bank maintained its base rate at 18%.

In its January statement, the National Bank explained why it expected a cautious approach. The statement identified uncertainty surrounding tax changes and the resumption of increases in utility tariffs and fuel prices, saying:

Accordingly, the base rate is highly likely to be maintained at its current level until the end of the first half of 2026

Why support can feed into property prices

Halyk Finance identifies a direct channel from preferential lending to housing prices. Lower interest costs expand the number of potential buyers and increase the amount they can afford to borrow. Builders need time to deliver additional homes, so demand can increase faster than supply.

The financiers association adds that limited housing supply in major cities, purchases motivated by inflation and other sources of financing supported prices in 2025. Property values rose at double digit rates while real incomes, meaning incomes adjusted for inflation, declined.

Pension savings were another substantial source of purchasing power. Transfers from the Unified Accumulative Pension Fund for housing purposes reached 839 billion tenge, up 106%. That amount was equivalent to roughly 36% of the year's 2.36 trillion tenge in new mortgages, showing the scale of money entering housing from outside new bank borrowing.

The association recorded 448,600 property transactions in 2025. Subsidized mortgages and pension withdrawals helped sustain activity, but households whose incomes lagged behind prices faced a widening gap between what homes cost and what they could pay.

Who can actually afford a mortgage?

The Sustainability Fund tested affordability by dividing the population into ten equal income groups, called deciles. It used a Housing Affordability Index, or HAI, in which a score above 100 means income meets the study's mortgage affordability threshold.

The 7-20-25 program scored 120 using the national average. The income breakdown was much less reassuring: only the richest tenth of the population exceeded the threshold, with a score of 143.8. The poorest tenth scored just 24.

Commercial mortgage products were less accessible. None of the products examined achieved a national average score above 100. The highest result, for Bank RBK, was 46.2. These calculations show why a program can appear affordable using average income while remaining beyond the reach of most income groups.

Bank decisions point in the same direction. The average mortgage rose from 11.2 million to 12.1 million tenge, an increase of about 8%. At the same time, the approval rate fell by 14 percentage points to 25.2%, equivalent to roughly one approved application in four.

Purchases using buyers' own funds reached 41% of transactions, compared with 19% a year earlier, according to the association's annual review. An earlier market snapshot put mortgage financed purchases at 62%, down from 91% in its comparison period. Both measures describe a market increasingly shaped by buyers with substantial savings.

A commercial mortgage illustration puts the pressure into household terms: buying a 30 million tenge apartment with a 20% deposit required official monthly income of at least 722,000 tenge. The deposit alone would be 6 million tenge, leaving 24 million to finance.

What preferential programs offer buyers

Otbasy Bank accepted applications for Nauryz and Nauryz Zhumysker from November 3 to December 1, 2025. The Sustainability Fund lists minimum deposits of 10% for newly built homes with completed interiors and 20% for unfinished homes or purchases on the secondary market.

Listed annual interest rates were 7% for eligible socially vulnerable applicants on the housing waiting list and 9% for other eligible borrowers. Effective annual rates ranged from 7.1% to 9.6% and from 9.4% to 13%, respectively.

Loans could run for up to 19 years, with maximum borrowing of 36 million tenge in Astana and Almaty and 30 million elsewhere. Up to 20% of the loan could be used to renovate the purchased home.

Nauryz Zhumysker covered more than 1,000 types of economic activity and over 8,000 worker occupations. Unlike the main program, it did not use competitive selection; applicants needed employment documentation identifying their occupation and activity. These conditions made occupation, eligibility and deposit size important gateways to cheaper credit.

Housing finance is concentrated in a few places and banks

Astana and Almaty accounted for about 55% of outstanding mortgages, according to the Sustainability Fund. The 7-20-25 program also showed strong concentration: Astana received 2,293 loans worth 42.4 billion tenge, while Almaty received 1,651 worth 30.7 billion.

Nationally, the program issued approximately 5,500 loans totaling 99.9 billion tenge in 2025. Shymkent received 698 loans worth 12.6 billion, and Karaganda region received 437 worth 6.7 billion. Zhetysu region recorded just three loans, while Ulytau recorded five.

Three lenders handled most of the program's business. Bank CenterCredit issued 36.2 billion tenge, Freedom Bank Kazakhstan 34.7 billion and Halyk Bank 17.6 billion. Together they supplied about 89% of the program's lending by value.

State support also extended to borrowers with older mortgage problems. By January 1, 2026, the refinancing program had refinanced 33,200 loans worth 211.3 billion tenge under its first component. Another component converted or refinanced 16,000 foreign currency mortgages worth 114.3 billion tenge, while additional assistance reached 10,600 vulnerable borrowers.

Construction warnings complicate the outlook

Figures cited for the first half of 2026 put the average new mortgage rate near 10%, while the base rate remained at 18% for most of that period. The financiers association's figures cited in the later analysis put commercial products at 14.3% of new bank issuance, down from 26.2%.

Later indicators pointed to weaker sales as well as concerns about future supply. September housing transactions numbered 35,406, down 14.3% from a year earlier, while sales of newly built homes were estimated to have fallen about 40%. Developers offered discounts of up to 30%.

Vyacheslav Lazarev, vice president of the Union of Builders of Kazakhstan, said notifications for new construction projects had almost halved in 2026, with developers largely completing projects started in 2024 and 2025. He forecast price increases of at least 15% in the second quarter of 2027 as fewer new homes reached the market. That figure is his forecast; the eventual scale of any increase is unknown.

Real estate agency head Galym Iskakov warned that pressure on developers could lead to savings on materials and interior finishes. Property specialist Marzhan Bakhyt described commercial mortgage rates reaching 21.7%, citing a 20 million tenge apartment with a 4 million deposit and monthly payments of about 300,000 tenge over 15 years.

Calls to expand preferential mortgages therefore meet a difficult tradeoff. More than 846,000 people were reported to be waiting for housing from the state housing stock, creating strong demand for assistance. Expanding purchasing power without sufficient additional homes can also keep upward pressure on prices.

The National Bank has raised similar concerns about state programs stimulating demand, changing mortgage pricing and displacing commercial lending in its financial stability assessments for 2021 and 2024. Its financial stability report series, published periodically since 2006, examines risks and vulnerabilities across the financial system. The practical challenge is to help households obtain homes while keeping prices and repayment demands within their reach.

Key Points

• Kazakhstan issued 2.36 trillion tenge in mortgages in 2025, up 16.7% from 2024.
• The financiers association puts preferential programs at 74% of new lending, with Otbasy Bank supplying the entire annual increase.
• The average rate on new mortgages fell to 9.8%, while the base rate reached 18%.
• Mortgage approvals fell to 25.2%, and the average loan rose to 12.1 million tenge.
• The Sustainability Fund's income analysis found 7-20-25 affordable only for the richest tenth of households.
• Subsidized lending and pension withdrawals supported demand while housing prices rose faster than incomes.
• Construction industry warnings point to fewer new projects, with Lazarev forecasting a price increase of at least 15% in the second quarter of 2027.