Kuwait faces real estate crisis as expats leave
Kuwait Published on: 12 May, 2018 @ 1:39 AM
Lawmakers have campaigned to reduce the number of foreigners in the country in order to employ Kuwaitis
More than 75,000 flats in Kuwait are empty and need to be “absorbed” by the real estate market in four to five years, a study has warned.
According to Kuwait Real-Estate Union secretary general Ahmad Al Dewaihees, there are currently 49,130 empty flats in Kuwait and 26,466 more are under construction.
The percentage of flats being used has dropped by 8.2 per cent, from 95 per cent to 86.8 per cent, over the last five years, he said at a news conference in Kuwait City.
The average monthly rent dropped by 13.2 per cent, from KD 278.9 to KD 242, Al Dewaihees said, citing “Al Murshed 2017”, a report prepared by the union.
The report included a survey covering a sample of 162,576 flats in 5,695 plots at 19 different locations.
13.2% average drop in monthly rents in Kuwait
The situation is most likely to be compounded as the number of expatriates who constitute the major users of flats in Kuwait has been dwindling.
Increases in medical fees, electricity charges and the cost of services and commodities have pushed several expatriates to send their families home to help deal with the increasing financial pressure and limit expenses.
Pressure by lawmakers to reduce the number of foreigners in the country and boost the chances of Kuwaitis to find jobs especially in the government sector is making headways, resulting in several expatriates leaving as their contracts were not, or will not, be renewed.
Foreigners make up around two thirds of the total population of 4.5 million.
According to the study, the foreign population numbers which increased by 4.8 per cent over the past five years dropped by two per cent in 2017 and would further fall by 1.5 per cent in the coming five years, according to the report, Kuwait News Agency said on Saturday.
Transactions for ownership of flats exceeded 1,000 in 2007 and 2008. However, in the aftermath of the global economic crisis, they ebbed in 2012. Although the market was able to recover with 973 transactions in 2015, it dropped to 671 last year.
News Source: Gulf NewsLike