KABUL - Billions of dollars in foreign aid
and lucrative reconstruction contracts fueled a
housing boom in Kabul for much of the past decade.
But the high-rises and pricey mansions that now
dot the smoggy skyline belie fears that the Afghan
capital is headed for a crash.
The
high-end real-estate market - propped up by
wealthy Afghan traders, foreign embassies, and
international organizations that jumped in to buy
or rent properties - can hardly be described as
robust today.
Kabul realtor Abdul Sami
Mirza made a modest fortune selling and renting
prime housing in Kabul's affluent Karte-Seh
district. Those days are over, he says.
"There are no buyers. They've all
disappeared," he says. "The
political situation is
bad, so people don't have the courage to buy.
[Last year] the market was very good, but then the
political situation badly affected those looking
to buy or sell their homes. Many homeowners are
going back overseas and leaving Afghanistan
altogether."
As tens of thousands of
NATO-led coalition forces prepare for a major
drawdown in 2014, uncertainty about future
security and the country's heavy reliance on
foreign aid have sparked an exodus. Demand and
housing prices have plummeted by as much as 50% in
wealthy neighborhoods occupied by Afghan
businessman and foreign workers.
Just 12
months ago, Mirza provides as an example, he
rented out a large house in Karte-Seh on around
240 square meters of land for around US$21,000 a
month. When the lease expired and the British
non-governmental organization that used it as a
guesthouse and office left the country, he was
stuck with an unrentable property. Even though he
has slashed the rental price to $9,000 a month,
Mirza laments, he has still been unable to find a
tenant.
'No money in the
city' Abdul Hamid, an Afghan businessman,
says he moved from his home in southern Ghazni
Province to Kabul five years ago in the middle of
the housing boom. Hamid, who says he went on to
build dozens of houses, reveals that he is now
heavily in debt and will leave the country as soon
as he sells his remaining properties.
"Every night, we contemplate whether to
stay in Afghanistan. I'm selling my properties
because of the economy. Every day people are
taking losses on their investments," Hamid says.
"There are no jobs, and there's no money in the
city. In the past, people trusted the housing
market, but not any more. People are tight-fisted
with their money and think about what will happen
tomorrow."
It's not for lack of demand. In
fact, demand for low- and middle-income properties
has never been higher in Kabul.
The lack
of affordable housing revealed itself as a
pressing social problem in recent years when
Kabul's population exploded as rural Afghans
headed to the capital in search of work. Inflated
rental and buying costs meant that many ordinary
people in Kabul, whose population rose from 1
million a decade ago to more than 5 million today,
were left with few options to keep a roof over
their heads.
Thousands erected illegal
dwellings on government land. Others constructed
mud houses resting precariously on slopes outside
Kabul. The most disadvantaged sought shelter in
slums and makeshift camps, where they have little
access to water or electricity.
They never
benefited from the city's previous housing
construction efforts, seeing them as catering to
the wealthy. And even as they see lucrative
properties being vacated, landlords are still
looking to maintain prices at levels that are well
beyond the average Afghans' reach.
Dependant on outsiders Thomas
Ruttig, co-director of the Afghanistan Analysts
Network, an independent research organization in
Kabul, says foreign aid and the forming of a
"military and contracting economy" lured many
Afghan expatriates and wealthy entrepreneurs back
to the country.
That environment lifted
many sectors, including housing, to unnatural
highs and led to an unbalanced economy, Ruttig
explains.
Afghanistan's weak position made
it nearly entirely dependant on outsiders. The
International Monetary Fund estimates that foreign
aid accounted for 97% of Afghanistan's entire
gross domestic product in 2010.
Copyright (c) 2012, RFE/RL Inc.
Reprinted with the permission of Radio Free
Europe/Radio Liberty, 1201 Connecticut Ave NW,
Washington DC 20036.
(To view the
original article, please click here.)
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