15.8 years needed for a Kuwaiti to repay housing loan
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‘Average price of housing in Kuwait City much higher…’
KUWAIT CITY, June 27: A recent study prepared by Marmore MENA, the research arm of the Kuwait Financial Center Company (Markaz), showed that the average price of residential property compared to the average income of the average citizen was 15.8 times, explaining that this rate indicates that it takes 15.8 years to repay the amount of financing granted to purchase housing in Kuwait from the real income of the average citizen by paying monthly installments, reports Al-Qabas daily. The study indicates that the average price of housing in Kuwait City compared to income is much higher than Dubai (4.4), Abu Dhabi (4.5) and Riyadh (2.8), and even higher than the most famous and desirable locations in the world such as London (14.5) and New York (9.9).
This statistics, sourced from CSP and Numbeo, measures the price of residential property to income: the ratio of average apartment prices to the average real family income, indicated by years of income, given the average apartment area is 90 square meters.
According to the latest statistics made available by the Public Authority for Housing Welfare issued in 2020, the number of applicants for housing units on the list is 91,700, and the waiting period ranges from submitting the application to allocating the housing unit between 10-15 years in the government housing program.
The study shows that the challenges facing the increase in the supply of housing in the country are that the number of applicants registered with the PAHW, and the ratio of the price of the housing sector to income which is 15.8 times in the country, in addition to that the prices of land as a percentage constitutes 80% of the value of the house. The study showed that there are a number of challenges facing the increase in the supply of housing in Kuwait. They are government
owned lands and non-participation of the private sector, lack of funding, high capital costs associated with infrastructure development, urbanization (population shift to urban areas) and bureaucracy.
The study highlights a set of suggestions to address the housing issue in the country, pointing out that the existence of an effective government housing program in Kuwait requires the following such as Repartition: reducing zoning requirements, re-allocation of vacant spaces; Mortgage Financing: involvement of local banks and finance companies, establishment of listed housing finance companies; Land Reform: involving the private sector in development, creation of a land authority and high-rise buildings: Increasing the floor area ratio (FAR).
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