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Kyrgyzstan: Housing Tops Political Agenda Amid Russia-Driven Crash

Kyrgyzstan: Housing Tops Political Agenda Amid Russia-Driven Crash by EurasiaNet

A campaign slogan – “Mortgages at 10 Percent Interest!” – is featured on a billboard touting a leading contender in Kyrgyzstan’s October 4 parliamentary elections. For many in this Central Asian nation, which is grappling with high inflation and currency depreciation, the cheap-credit pledge seems too good to be true.

And yet the campaign promise made by Respublika-Ata Jurt, a hybrid business-nationalist party that has campaigned in bold and populist fashion, has traction. It seems to be tapping into deep popular insecurities about a housing market undermined by flagging remittances.

Securing housing and mortgages has long been a problem for new arrivals to Kyrgyzstan’s main urban centers – the capital Bishkek and the southern city of Osh. Both cities are fringed with grim and often illegally constructed settlements of ramshackle, self-built housing that serve as testimony to the hunger for cheap, permanent accommodation.

The market for legal housing, which tends to be priced in US dollars, has for many years been fuelled by the cash earned by a million or so Kyrgyz men and women working abroad, mainly in Russia.

With the collapse of the Russian ruble to almost half its value against the dollar since the start of 2014, remittance money has been able to buy far less. Kyrgyzstan’s own currency, the som, has taken a 30-percent hit in the space of a year, compounding a growing domestic liquidity problem.

And still, house prices have remained stubbornly high, falling by 10 percent at most.

“If migrants used to send home nearly $2 billion and half of that went onto the property market, now they are sending closer to $1 billion and people are...