The housing market is special in that houses are immobile, costly and durable. In this paper we look at the determinants of prices of the housing market of Almaty. What affects the prices of houses and apartments? How was the housing market developing during the economic boom and after the financial crisis started? The paper starts with a review of the existing models. The theory indicates the size, quality and location as the main determinants. To apply the hedonic model, we collected a random sample of about 2,500 observations on housing units in seven districts of Almaty from newspaper advertisements. Those units were categorized by the number of rooms, quality, district, floor, etc. Some of those characteristics are nonnumerical and require dummy variables. With the data collected, we ran several regressions in Eviews. We have obtained valuation figures for different characteristics of housing units. The data clearly show existence of a bubble during 2006-2007. The regression results revealed the differences between different districts, dependence on the quality and floor. Among unexpected results are the facts that corner apartments and floor level have negative coefficients, perhaps because first-floor apartments are considered as potential commercial property or perhaps lower stories are preferred in general but the first storey is the least preferred. Some questions, such as valuation of luxury apartments or those in the north of the city remain unanswered because of lack of data. It would be also interesting to correlate housing prices with the interest rate on mortgages. A shorter version of this paper has been published as K. T. Mynbaev and S. Ibrayeva, Housing market of Almaty, Herald of the Kazakh-British Technical University, N 2 (17), 2011, 88-93.