Against the backdrop of a stable real estate market development in Kazakhstan and active investor attraction, the country becomes a promising location for launching MLM projects.
In this article, we have conducted an overview of the real estate market in Kazakhstan and discussed how MLM projects operate in the real estate sector. Additionally, we have analyzed whether starting an MLM business in the real estate market of Kazakhstan is advisable at this time.
Features of MLM companies in the real estate market
Companies utilizing the network marketing model (MLM) sell their products or services through a network of independent distributors. This business model allows all partners of the network project to earn profits in the form of commissions from the sales of products and from the sales made by the recruited distributors, as per the marketing plan. Project participants expand networks of consumers and partners, thereby increasing the profitability of the business. MLM companies in the real estate sector operate on the same principle.
MLM in real estate refers to organizations that recruit independent agents for selling real estate or providing other related services in this direction.
Using the MLM model in the real estate market enables businesses to quickly acquire clients and partners with minimal marketing expenses.
Due to its vast size, the real estate market creates several directions for building MLM projects:
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Brokerage MLM. The primary focus is on selling houses, apartments, or other types of real estate. Agents not only handle property sales but also build their network by recruiting other agents and providing them with sales training. Commissions are earned from both personal sales and the sales made by the agents in the established structure.
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MLM of an investment type. The main activity is selling rental and investment trusts in real estate (REITs). Company agents also earn profits in the form of commissions from the sales of trusts and from attracting new participants.
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Educational MLM. The main activity is selling educational programs for real estate agents and investors. In such companies, agents earn income from the sales of educational materials and from the sales of agents in their created team.
Therefore, in all real estate MLMs, agents earn from completed sales and the expansion of the project's partner networks. Commissions in such companies are usually set as a percentage of the sold real estate's value.
Often, compensation marketing plans in real estate MLM projects combine with investment plans. In this case, agents can invest their own funds in real estate to gain profit and also earn from the attracted investments.
Analysis of the real estate market in Kazakhstan
The real estate market in Kazakhstan makes a significant contribution to the country's economy, and a large portion of both local and foreign investments in Kazakhstan are directed towards real estate.
In 2021-2022, there was considerable activity in the real estate market due to government stimulation, including pension savings and preferential mortgages. Today, the real estate market has started to stabilize, and housing prices are increasing at a slower pace.
In April 2023, prices for secondary housing increased by 3.8%, and for new housing – by 7.8% compared to the previous year. Real estate in newly constructed buildings became more expensive by 9.3%, and rental fees rose by 27.6%. The average cost of purchasing property in Kazakhstan is 489.2 thousand tenge (approximately $1097.6) per square meter, while the rental cost is 4.6 thousand tenge per square meter. The highest property prices are observed in Almaty and Astana.
Under the influence of economic instability worldwide, increased pension thresholds, and changes in lending practices, there was a decline in real estate purchases at the beginning of 2023. However, now the real estate market in Kazakhstan is showing signs of recovery. During April, the number of property transactions increased by 29.5%, reaching a total of 31,455 units. One- and two-bedroom apartments in newly constructed buildings are in the highest demand.
The demand for rental housing remains consistently high even after the increase in prices. Many residents of Kazakhstan have started to prefer renting apartments in newly constructed buildings, and since the beginning of the year, the demand for such rentals has increased by 21.7%.
The real estate market has been positively influenced by the overall population growth, which currently stands at around 19.6 million people. The influx of a significant number of immigrants and businesses from Russia is creating a new demand for real estate in Kazakhstan.
Among immigrants, there is a high demand for comfort-class housing, while relocated companies are seeking quality office and warehouse spaces. Kazakhstan is facing a shortage of commercial real estate, which presents opportunities for the development of construction projects in this direction and an increase in commercial property rental prices.
Is it worth starting MLM in the real estate market in Kazakhstan now
Real estate in Kazakhstan is becoming a significant driver of economic growth and an attractive location for business development. The industry provides opportunities for successful MLM business development, thanks to the influence of numerous positive factors:
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the growing real estate market with consistent demand for residential and commercial properties contributes to better customer acquisition;
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the development of infrastructure even beyond major cities, the construction of new residential complexes and office buildings, increases the demand for real estate agent services;
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the reduction of mortgage interest rates by Kazakh banks gradually leads to an increase in home purchases among the population;
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the planned introduction of new government mortgages will result in a rapid surge in property prices and demand;
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more and more investors are becoming interested in the country's real estate as an opportunity for passive income, creating a favorable environment for investment MLM projects;
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MLM agents do not require any licenses, unlike realtors, which facilitates partner attraction in the network business;
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the use of digital technologies, such as virtual tours, electronic platforms, and online consultations, streamlines the work of agents and the project as a whole.
The real estate industry is already filled with many realtors and brokers, which can influence the operations of MLM projects in the real estate market in Kazakhstan and make market entry more challenging. To build a recognizable and appealing brand, it is essential to create an offering that will fully meet the needs of potential clients and partners.
The real estate market and MLM business in Kazakhstan are regulated by legislation and require compliance with all norms. To conduct business in real estate, state registration and obtaining a special license are necessary. Additionally, the payment of income tax is mandatory, and services must be provided exclusively through contracts of sale, lease, or other agreements depending on the type of transaction.
Real estate in Kazakhstan is one of the most dynamically developing markets in the region. With the increase in population and business growth in the country, the real estate market will continue to expand and become even more attractive to investors. Therefore, favorable conditions have been created for starting a network business in this sphere. However, before launching your MLM business in the country, it is essential to conduct a detailed analysis and consider all factors that may affect your operations.
Thorough planning, market and legal environment analysis, as well as proper development of the MLM project and marketing plan will contribute to success. The FlawlessMLM team has years of experience in successfully launching MLM projects in this region. Follow the link https://flawlessmlm.com/mlm_consulting.
