It is going to be very bad. House prices were driven up by the rent prices the international organisations were prepared to pay. A regular house in downtown Kabul would return around US$ 25000 per year for the owner. This encouraged many to invest in property and the price of a flat in Kabul residential areas climbed to a range of 700000 to 1 million dollars. Even the suburbs such as charai Qambar saw a huge rise, a house would be around half million dollar at the very least in this part of town. Another reason for the increase is cultural, I went to see a family friend some time ago and he advised that I should be buying a house. Many people who made good bucks in the gold rush of foreign assistance have invested the money in a house. It is seen as an investment but also an icon of status.
Now we are facing a scenario where house prices in the suburb of Kabul cost as much as to buy a similar one outside London in the UK and higher than most European countries.
The international money has also funded the extravagant mansions in Kabul's most expensive neighbourhood of Shirpur, Wazir Akbar Khan and Shari Naw. Ornately gilded pillars hold up pastel-hued balconies; brightly coloured domes crown mosaic walls made of mirrored tiles. In this part of town most homes were built by Afghanistan's corrupt political elite on land stolen from the poor and the state since 2003. A good majority of these houses are rented by mercenaries, embassies, the UN, warlords, MPs, ministers, high ranking government officials and television journalists, scrambled to pay tens of thousands of dollars in rent, and moved in. these houses are known as "poppy palaces" because of the suspicion that they were built with the proceeds of opium smuggling. These are the luxury houses and the first thing which will happen as the tide of Western money starts to recede is a drop in the prices of these houses. This has already started to happen. The prices of these houses are crashing as we talk. The prices had plunged by half and plummeting at a faster rate. The rent for one 14-bedroom house had dropped from dollars $18,000 a month to $9000. Properties are empty for the last six months since Obama announced the withdrawal of troops.
Once the foreign money starts to recede considerably in the next couple of years the time of bust will set in. not only the prices of houses come to the real world level but there will be a serious panic, initiated and stimulated by panic selling.