Kuwait re­alty sec­tor stag­nant but may re­vive early next year

Kuwait Times - - LOCAL -

KUWAIT:

Do­mes­tic re­alty sec­tor is cur­rently lack­lus­ter due to over­sup­ply and low de­mand, ac­cord­ing to ex­perts. The lo­cal market is likely to wit­ness deeper stag­na­tion in the fore­see­able fu­ture, largely af­ter a large seg­ment of traders in Boursa Kuwait (for­merly Kuwait stock ex­change) shifted to the prop­erty sec­tor with “ran­dom loans from lo­cal banks.” Sec­re­tary Gen­eral of the Real-Es­tate Union Qais Al-Ghanim said in an in­ter­view with Kuwait News Agency (KUNA) that the lo­cal market usu­ally wit­nesses in­ac­tiv­ity dur­ing sum­mer, fore­cast­ing some trades in the year’s re­main­ing time, when many res­i­dents would seek to rent apart­ment flats.

How­ever, if de­mand for such res­i­den­tial units does not ma­te­ri­al­ize in Novem­ber and De­cem­ber, rents may drop by KD 50, con­sid­er­ing cur­rent hard eco­nomic con­di­tions and ex­ces­sive sup­ply. In such an even­tu­al­ity, other sec­tors will be neg­a­tively af­fected too. See­ing bill­boards in pub­lic of­fer­ing rented with spe­cific rent “is an in­di­ca­tion land­lords are not in good con­di­tion,” he opines. Al-Ghanim added that the sec­tor was also neg­a­tively af­fected when a large num­ber of in­vestors-in­ex­pe­ri­enced in the re­alty business-in the lo­cal bourse shifted to real-es­tates, tak­ing loans from banks in a ran­dom fash­ion and with­out sound cal­cu­la­tions.

Cit­ing other fac­tors, he men­tions re­cent Govern­ment’s dis­tri­bu­tion of large res­i­den­tial com­plexes to the cit­i­zens and ex­pa­tri­ate in­vestors’ shift­ing to the business sec­tor. More­over, AlGhanim ad­vises cit­i­zens plan­ning to pur­chase re­alty plots to wait till Jan­uary, when prices are forecast to drop. Mean­while, Mo­ham­mad Al-Mu­sawi, man­ager of Al-Mu­sawi Prop­erty Com­pany, con­curred that prices in the hous­ing and in­vest­ment sec­tors would drop due to the above­men­tioned rea­sons.

In­vestors are con­cerned that the Cen­tral Bank of Kuwait may is­sue strin­gent reg­u­la­tions for prop­erty cred­it­ing, he says. A res­i­den­tial plot lo­cated in the sec­ond row of houses close to the beach in the beach-side Sabah Al-Ah­mad district used to be traded for KD 190,000, but now its cost ranged be­tween KD 105,000 and KD 90,000. Many cit­i­zens now fa­vor this sea­side district for sta­te­owned chalets, he says, adding that Sabah Al-Ah­mad district is quite fea­si­ble re­gard­ing in­vest­ments be­cause of abun­dant avail­able ser­vices and util­i­ties. He also forecast that rents of res­i­den­tial apart­ments will drop by 15 per­cent in the fore­see­able fu­ture. — KUNA

Photo shows Kuwait sky­line from the Ara­bian Gulf Road. — KUNA

Sec­re­tary Gen­eral of the Real-Es­tate Union Qais Al-Ghanim

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.