Uncertainty about the future has clouded the thriving real estate market. Rents have fallen sharply in three of Afghanistan’s big cities.
Property agents say prices of properties and land have fallen dramatically in recent months.
Uncertainty about the future has clouded the thriving real estate market. Rents have fallen sharply in three of Afghanistan’s big cities.
Property agents say prices of properties and land have fallen dramatically in recent months. The 2014 deadline for the withdrawal of foreign combat troops is the main factor inhibiting the property market in the three big cities of Kabul, Herat and Mazar-e-Sharif.
Other reasons dampening the property market are an overall decrease in foreign aid, media reports about the usurpation of land by powerful people, growing insecurity in some provinces, rise in joblessness, and concerns about the transfer of power in the wake of presidential elections next year. The flip side is that much of these are neither backed by hard evidence nor quantifiable.
However, sociologist Hajji Mahdawi believes the property market may be finally stabilising instead of being led by speculative capital. “If prices are coming down we cannot blame 2014. Rather that it is heading to the real price,” he says.
Kabul
Property prices went through the sky after 2002 with the surge in demand for housing with the return of tens of thousands of Afghan refugees. With international aid pouring in for humanitarian and development purposes there was constant demand for offices and housing for expatriate staff.
Jamshed, a property dealer in the Karte Selocality, says: “There has been a 30 percent decline in property prices in the last two years.”
Jamshed has not been able to pay the monthly rent on his office, which he was previously paying with the commissions he made on properties rented out.
Mohammad Hussain Rahimi, owner of Surabi Property in Kabul, also speaks about a 30 to 50 percent decline in rents on houses depending on the location of the property.
According to Rahimi, houses that could be rented for 4,000-5,000 USD per month two years back now are going at rates between 1,500 and 2,000 USD. There are fewer people looking to rent with the number of foreign organisations working in Afghanistan decreasing, and ordinary Afghans not able to pay such high rents.
“I dealt in a sale of 4 beswa (one beswa is equal to 100 square metres) in Karte Charwhere each beswa was for 70,000 USD. Two years back the price of each Beswa in the same location was 120,000 USD,” he confides.
Hekmatullah Faizi is another property dealer in Karte Se. He says he has suffered a 50 percent decline in his business in two years. “My monthly earnings were 10,000-20,000 USD two years ago. Now I cannot earn even my daily running cost,” he says.
“I have properties to rent but people are not looking to rent because theirfinancial means have decreased a lot,” he explains. “They don’t have the ability to rent or buy houses. And, the wealthy have already moved their money abroad.”
People think civil war will start again when NATO pulls out from Afghanistan, he says.
Engineer Ghulam Ali who works in the construction industry, told Killid there was a slump in the housing sector. “The year 2014 is on everyone’s lips,” he says. “The work of construction companies is practically at standstill. There are fewer houses being constructed. Work opportunities in the construction sector have been hit,” he adds.
The uncertainty has affected people’s willingness to spend on property.
Abdul Rashid a resident of Kabul points out the property market is also probably affected by uncertainty about the legality of new townships that are being constructed by “powerful people”. Killid has covered the subject in great detail in previous issues. See ‘Convict the corrupt if land grabbing is to stop’, Killid 548) and ‘Powerful plunder public land’, Killid 533.
The government’s own figures reveal powerful land mafia has usurped 1.9 million acres or 4 million jeribs of land. Extortion and illegal transfers of both public and private land remain unchecked. Dr Azizullah Ludin of the High Office of Oversight and Anti-corruption (HOOAC) says new towns have been constructed on such lands.
“The future of illegal townships and properties are not known. People don’t want to invest their money and lose it,” says Abdul Rashid.
Herat
Property agents estimate a 50-60 percent decline in business over the last two years, which has been confirmed by Sayed Ghulam Mohammad Rahmani, the head of the provincialDepartment of Justice. He sees a 50 percent drop in legal documentation work related to property deals. Also, the department has received fewer applications for licences for new property agencies, he adds.
The slump in the housing sector has been bad also for those who have been illegally appropriating land for speculative purposes. According to Rahmani, land grabbing has slowed down. Powerful people have grabbed 65,000 jeribs of lands in Herat province.
Mazar-e-Sharif
Both property prices and rents have fallen in the Balkh capital. There are scores of new constructions but no one is buying, say property dealers.
Din Mohammad Malek, a property dealer in Mazar, says no one is coming to rent or buy property any more. In the past tens of customers would stream in daily.
He lists the impending exit of foreign troops, and rising insecurity among people about the future, including uncertainty about the presidential poll as reasons.
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