Turkmen elite buy up luxury housing in bid to protect capital amid devaluation

Turkmen elite buy up luxury housing in bid to protect capital amid devaluation
For those with elite credentials, a luxury property rat race is under way in Ashgabat.
By bne IntelliNews October 31, 2018

Turkmen government officials and wealthy entrepreneurs are buying up new elite residential property in the “Olympic village” of Turkmenistan's capital Ashgabat in a bid to protect capital by investing in real estate amid the ongoing depreciation of the country's currency, opposition-run and foreign-based news website Chronicles of Turkmenistan has reported.

Apartments cost from TMT780,000 to TMT1.3mn, which amounts to $223,000-$376,000 at the official rate of the Turkmen manat, but stands at $39,000-$66,000 at the black market rate. In the wake of the slump of world oil prices that hit Turkmenistan’s economy and drained government coffers, the divergence between the official and black market rates of the Turkmen manat has widened significantly. Despite the recovery in hydrocarbon prices, Turkmenistan is said to be facing a dire financial crisis, which has even led to passport-based bread rationing.

Thirty-year mortgage loans are reportedly being allocated for the purchase of the apartments, although a 10% deposit on the total amount must be paid off straightaway.

According to cited officials, the properties are being sold with the priority given to families with many children and families that are sharing apartments with other families. However, since the loan terms and conditions require a minimum TMT2,900 monthly salary, the apartments are not affordable for the majority of Turkmen people. Monthly salaries average TMT1,000-TMT1,500 in Turkmenistan.

The apartments are said to be selling out fast—one apartment complex had seen 96 out of 118 apartments sold as of late October.

Turkmen elite purchasers are reportedly buying out multiple apartments and assigning them to their relatives, children and grandchildren.
Aside from apartments, the government is selling two-storey houses in Ashgabat’s suburbs, which cost an average TMT412,000.

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