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Kuwait Real Estate News

Property prices to dip during second half of 2015

Experts in local real estate market are of the opinion that second half of the year will see drop in prices due to recession during the summer season, apart from regional factors.

They remarked that the market will suffer a trading dip during second half of 2015, due to summer months and the forthcoming holy month of Ramadan, during which, the trading in property gets weak. The market would also be affected by regional situation and forecasts of rise in interest prices on Kuwaiti dinar, apart from several local auctions pertaining to residential property, they said.

This does not involve severe dip in property prices, particularly the residential ones, which see continuous demand from nationals, as although the prices fell during some of the recent property auctions, they rose again immediately, they said.

It has also been predicted that real estate prices would drop due to low yield of private residential units and investment housing units, following increase in land prices.

The President of Real Estate Union, Tawfeeq Al-Jarrah said there is slight retreat in prices of residential and investment property in Kuwait, and hoped the recession to take place until the year-end. The investors are wary of entering into new real estate investment due to the current market situation, particularly following the negative developments in GCC region, he said. Moreover, any increase in interest prices on dinar valued deposits would negatively impact the real estate prices in Kuwait, he pointed out.

There has been no decrease in demand for private homes, despite the government’s distribution of housing units, as their housing units take years for handover. Although the prices of residential properties will see a dip in near future, it will only be temporary as there are numerous other factors that affect the market. For instance, the continuous auctions have been a factor for dip in residential lands in several areas in Qatar.

The KFH auction also partially affected the market, with prices having gone up after one or two months of auction, he said.

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