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Thursday , October 6 2022

Occupancy rate of residential flats sees decline by over 24%

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Loss of expat jobs cause of decrease

KUWAIT CITY, Aug 11: According to a recent study conducted by the Real Estate Union, two-bedroom apartments are widespread in Kuwait such that the number of such apartments has reached 242,499. One-bedroom apartments came in second place with about 90,760 units in various parts of Kuwait. In third place is three-bedroom apartments with a total of 46,420 units followed by studio apartments with 15,300 units in total, and then four-bedroom apartments in last place with 1,500 units. The study indicated that apartments consisting of two bedrooms (the widest segment in Kuwait), and of three bedrooms have an equal occupancy rate of 84.5 percent each. The occupancy rate of one-bedroom apartments was about 84.7 percent, and that of studio apartments was 87 percent.

A number of realtors attributed this to the increase in tenants’ demand for small apartments during the last period, as they were in search of apartments of lower rental value due to the conditions imposed by the COVID-19 pandemic and the departure of many residents or their families from Kuwait. They explained that vacant apartments in Kuwait increased in the last four years by about 24.5 percent from 48,973 vacant apartments in 2017 to 61,008 in April 2021. The average occupancy rate in the investment real estate sector is currently 84.6 percent, reports Al-Rai daily. The large evictions during the recent past were due to the loss of many jobs and the decline in the employment base of expatriates by five percent. This affected the investment real estate sector and caused a decrease in the occupancy rate and rental rates by about 10-15 percent.

The Real Estate Union is expecting the decline to continue as the expatriate labor base in Kuwait increased by another five percent in 2021. Regionally, the study focused on the four highest occupied areas – Farwaniya, Hawally, Salmiya, and Khaitan. Khaitan turned out to be the highest occupied area for the four-bedroom apartment category with a rate of 90 percent, the studio apartment category with 89.9 percent, and for three-bedroom apartment category. Farwaniya ranked first for occupancy rate of one-bedroom apartment category with 87.6 percent, and 88.4 percent for the two-bedroom apartment category.

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