New urban areas expected to stir real estate market

KUWAIT: Kuwait’s real estate market has been in recession over the third quarter of the year, but is expected to see recovery in the near future, in particular in new urban areas. The expectations are stirred by the development projects the government is carrying out, together with the rise of oil prices, in addition to the rising demand in the real estate sector.

Director General of Athra Real Estate Company Maitham Al-Shakhs said the new areas would witness noticeable activity over the rest of 2017. Yet, these areas are facing certain problems that need to be solved. These are topped with the completion of the infrastructure in some parts of the Jaber AlAhmad New City, he said.

As rent has been slightly on the decline in some parts of South Surra during the third quarter of the year, Al-Shakhs predicted demand on apartments would rise in the neighborhood, mainly in Zahra, Shuhada and Hateen. He noted that demand has also risen on plots of land in Abu Fetira and Masaeil, and more is expected in 2018.

According to Al-Shakhs, the market was negatively impacted over the past period by some MPs’ calls for reducing migrant labor in the country, besides the fall of rental value over the past two months in vivid lively areas like Farwaniya, Hawalli and Salmiya. Real estate activities were notably declined during the period January-September 2017, compared to last year chairman of Al Dughaishem Real Estate Company, Abdul Aziz Al-Dughaishem.

However, inquiries have been growing by buyers about the targeted areas, a signal of expected rise in the demand on residential and investment property. Investment property market already active in different districts like Hawalli and Salmiya, and slightly in Al-Mahboula, Al Dughaishem added. He referred to a plenty of offers for such property almost nationwide, making it easy for buyers to choose according to their financial capacity, either for present or future investment.

The real estate market is moderately active, especially in terms of residential demand and long-term investment, said Derwazat Al Safat Real Estate Director General Fahd Al-Mumen. Speculators seem to keeping away from the market for the difficulties they have been facing since the year started, he said.

Mumen foresees a more active market during the second half of 2018, mostly in East Qurain, Abu Fetira, Masaeil and South Surra, as many will prefer such new areas, for their developed infrastructure. He also expected the rental value in Farwaniya, Hawalli and Salmiya, and other areas that are already highly populated, to moderately drop to attract dwellers. Sales in all sectors of the Kuwaiti real estate market have been affected due to pressing, technical factors, geopolitical developments and economic resolutions. Oversupply and declining demand, especially in the investment and commercial sectors, have hit the market, as many investors have also transferred their capital to brisk securities market for rapid revenues due to the temporary recession in real estate. —KUNA