Kuwait real estate sector to flourish in 2020: experts
Opinion Published on: 23 January, 2020 @ 11:18 AM
Kuwait’s real estate sector witnessed a flurry of transactions in 2019, particularly in private and commercial properties, indeed reflecting a recovery throughout the year. Security of real estate investments has been the safe haven for investors coupled with increasing demand on private, investment and commercial properties.
The Ministry of Commerce and Industry, contributing to this upward trend, adopted some regulations that would prevent fraud by some companies in real estate exhibitions as well as implementing electronic brokerage. Traders also hoped a law mortgage law would see light soon to enable financing of private houses which will ultimately revive the market, banks and constructions’ sectors.
Up to KD 3.4 billion ($11.5 billion) were traded in the real estate sector in 2019, of which around 50 percent in private properties. Investment properties have exceptional revenues which exceeded those of the commercial properties, according to a report by Kuwait Finance House (KFH). Investment real estates recorded a 7.3-8.3 percent income in the third quarter of 2019.
Experts projected high demand in 2020 because there was not enough private, investment and commercial properties that meet this demand. This factor, they said, contributed to maintenance of prices in 2019. “Local real estate sector saw a noticeable improvement in 2019 when we compare it to 2016 and 2017, the two years that witnessed a remarkable decline in this sector,” said Sulaiman Al-Dulaijan, of Al-Dulaijan Real Estate brokerage office.
He added that the real estate sector attracted a large segment of investments because it has a yearly yield of 7-8 percent. Demand on housing sector is the highest in Kuwait, added Dulaijan, making up 50 percent of total transactions. Investors with small capitals, he noted, were after private houses which were in the range of KD 250,000 and KD 500,000 ($850,000 and $1.7 million) for a secured income.
Maitham Al-Shakhs, Director of Athra Real Estate Company, said traders in the real estate sector were awaiting projects in the north of Kuwait and Al-Harir City, part of New Kuwait 2035 vision. He said real estate sector was the safest investment with high and guaranteed revenues. Shakhs hoped real estate laws be modified to facilitate transactions.
News Source: KUNALike