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Housing rentals, food prices, affected by inflation

According to an online poll on inflation, conducted by Arab Times, majority of respondents (48%) believed that inflation has mostly affected housing rents in the State.

About 41% of the respondents, which form the second biggest majority of voters, felt that there has been a steep hike in food prices. The online economic reports said that soaring food prices have driven up the inflation rates in Kuwait.

Food is a major contributor to the Consumer Price Index (CPI) based inflation of Kuwait, showing that the hike in overall inflation of the state is largely due to high food prices.

A report released by a local bank earlier during the year said that there has been 3.1 percent year-on-year increase in July from 2.8percent in June, which is almost exclusively due to sharp increase in food prices.

The prices of housing rents indicate that inflationary pressures remain fairly subdued. The housing services sub-component, particularly housing rents, failed to register an increase for the seventh consecutive month, keeping the inflation at just 1.5 percent year-on-year, as of July.

Respondents to the poll are of the opinion that housing rents have been increasing at the rate of 10 percent every two years. Majority of the people complain that apartment caretakers are taking advantage of the huge demand for flats and have increased the rents at their will, with total disregard for contracts.

Some tenants have attributed the housing rent inflation to demolition of old buildings in the city, leaving majority of them to hunt for new apartments. The rents in Khaitan, Riggai, and Abbasiya have seen sharp increases in the recent past.

Some have even blamed the sluggishness of the commercial realty market, which is being made up through residential rents by landlords, as the demand for houses is always high.

The private sector is also one of the main reasons for lack of demand in office space, as it has turned into windfall for businesses, and are able to hire offices for the current rates. However, only a small 3 percent of the voters felt that inflation has affected commercial rentals the most in Kuwait.

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