KUWAIT CITY, Aug 18: A number of real estate experts affirmed that the recent departure of a large number of expatriates from the country did not negatively impact the real estate market, clarifying that the inflation witnessed in 2014 is the main reason behind the collapse of the sector, reports Al-Anba daily.
Real-estate expert Sulaiman Al-Dulaijan insisted that the statistics circulating on social media concerning the rented properties and rental values are not accurate. According to the recent reports issued by the World Bank, Kuwait Finance House (KFH) and Kuwait Real Estate Association, 80 percent of the real estate properties in Kuwait are occupied. He stressed that the absence of good marketing is the reason why there are vacant real-estate properties.
Al-Dulaijan explained that proper finishing of the real-estate utilities, their location and the cost are an integrated package that should be upheld by the owners of the real-estates. Hike in electricity and water tariffs affected the investment real-estate sector along with the exit of a large number of expatriates.
According to statistics issued by Ministry of Justice, the real-estate sector has witnessed an increase of KD 1.6 billion in the trade exchange during the first half of 2018. Dulaijan recommended the issuance of a law that will allow expatriates to buy real-estate in Kuwait based on fixed regulations in order to prevent them from buying more than 200 square meters.
Meanwhile, real-estate expert Bandar Al-Humaidhi stressed that 80 percent of the real-estate properties in Kuwait are mortgaged by banks, urging the owners to set appropriate rental values for their flats. He indicated that the coming phase might witness a reduction in the rental values by 10 to 15 percent in residential investment sector, revealing that the value of commercial real-estate properties has recently increased by 100 percent.
Furthermore, Manager of Shmoukh Real Estate Company Farhan Al-Saba’e affirmed that real-estate values will not fall, as claimed by social media. He insisted that the inflation of values witnessed in 2014 is the reason for the collapse of the sector, indicating that the present situation represents a cost-correction process. Al-Saba’e revealed that the rental values in interior locations have reduced by 20 to 25 percent, adding that the coming phase is expected to witness stability in costs.
In addition, Manager of Safat Derwazah Real-Estate Company Ali Al-Safar said some real-estate projects take about 12 years to be completed, according to the undersecretary of Ministry of Public Works, which is the reason why there are many vacant flats. He affirmed that the current phase is witnessing correction of the changes that were witnessed in 2014 during which some flats of size 60 square meters were rented out for KD 380 per month.