House-price fever grips Tajik rich

Dushanbe is now peaceful after years of strife

Tajikistan, the poorest ex-Soviet state, is in the throes of an unaccustomed house-price boom.

With an economy battered by a bitter civil war during the mid-1990s, Tajikistan's average income is barely $1,100 a year.

But the peace process is now starting to pay dividends, and the influx of returning refugees, diplomats and a few foreign businesspeople has sparked a huge demand for property in the capital, Dushanbe.

More worryingly, the biggest spenders are the new rich of Tajikistan's most lucrative industry, narcotics.

Flat out

Reliable economic data is not available, but anecdotal evidence suggests that central Dushanbe property has doubled in value in the past few weeks alone.

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Most small flats now cost up to $15,000, and some luxury apartments are even fetching the sort of inflated prices seen in Moscow.

Dushanbe has very few homes up to Western standards, especially as regards security, a prevailing concern in Tajikistan.

And purchasers have been encouraged by a protracted period of political stability, which has encouraged the opening of new embassies, and even the beginning of commercial activity in key industries such as tourism.

Smugglers' spree

The illegal drugs industry, however, seems to be the source of much of the new property money.

Tajikistan sits on the Afghan border, and is a conduit for heroin heading to the Russian and European markets.

According to local media reports, Tajik drug-smugglers have turned to property investment as a way of laundering their proceeds.

The sudden growth in this form of investment has led to concerns about the poor, still the overwhelming majority of the population.

The government has made little effort to provide affordable state housing, and the demand for property could lead to legitimate low-income tenants being turfed out, some have warned.