Kabul’s Apartment Market Faces Decline Amid Economic and Environmental Challenges

Construction companies in Kabul report a significant drop in apartment sales over recent months, attributing this trend to economic challenges, security issues, and water shortages.

Decline in Apartment Sales in Kabul; Construction Firms Concerned

Several construction companies in Kabul have reported a sharp decrease in apartment sales lately. They identify economic woes, water scarcity, and regional developments as primary factors contributing to the current market stagnation.

One employee from a construction firm stated that prices have notably decreased, leading to a cooler real estate market in Afghanistan. “From the month of Hamal until now, for about six or seven months, there has been a significant decline in buying and selling,” he revealed. This employee, wishing to remain anonymous for security reasons, also noted the impact of the U.S.-Iran conflict on the market, adding, “Many apartments are purchased by Afghans living abroad.”

The deputy of another construction company in Kabul echoed the concerns regarding security as a factor cooling the market. He stated, “People’s motivation to invest in real estate has decreased because the situation is unstable.” He emphasized the severity of the water shortage issue, stating, “This problem is acutely felt.”

Real Estate Market Developments and Their Impact on Citizens

Some owners of transaction advisory offices argue that the Taliban government’s promotion of residential projects has contributed to the decline in sales of private companies’ apartments. The Ministry of Urban Development and Housing under the Taliban recently announced that the construction of housing blocks and urban projects in Kabul is ongoing.

Sardar, owner of one of the advisory offices, pointed out, “The price of any type of house varies based on location, construction quality, and amenities. Newly constructed apartments in Shahr-e Now are priced between $750 to $900 per square meter.”

In recent years, the influx of returning migrants to Afghanistan has increased the demand for housing. However, some residents have complained about difficulties in finding rental homes and the rising cost of rents. This situation has prompted some investors to turn to construction activities in Kabul.

Nonetheless, the growing population in the capital has placed additional pressure on urban resources and services, leading to challenges such as water and electricity shortages, as well as air pollution becoming new pressing issues.