Kuwait Real Estate News
Kuwait property market likely to see huge supplies
The Kuwaiti property market could witness high supply in near future, says the Chairman of a Kuwaiti property Company.
Faraj Al-Khidri, the Chairman, Al-Mutakhsis Real Estate Company, mentioned this in his report, which explained about the occasional fears over the realty sector in Kuwait.
The real estate sector in Kuwait is growing rapidly due to high demand, economic growth, high per-capita income, increasing governmental investment on infrastructural projects, high population and cash fluidity.
Pointing towards major governmental support for the sector, through funding of real estate projects at low interest rates, high returns of investments in properties and emergence of specialized property corporations, he said, while some of these remain favorable to the sector for sometime, the high price levels that are currently being witnessed, could lead to imbalance in supply and demand over a period of time.
Currently, however, real estate investment is yielding high profitability, in comparison to various other economic sectors. For instance, a real estate investor can make up for cost of construction through rentals alone, within a span of eight years.
Al-Khidri revealed that mega enterprise delivery operations would begin successively during the coming period, which will help determine whether the property market can absorb thousands of new housing units, thereby reshaping the future of realty sector. About 100,000 housing units are likely to be delivered during the next couple of weeks. But, such a big figure will not lead to drop in the high rentals that Kuwait is now facing, he said.
This major paradox reveals a clear-cut division in the local realty market, which, by itself, explains to a certain extent, the query which a few analysts have been pondering, about soaring rentals, despite huge investments happening in the sector over the last couple of years, concluded Al-Khidri.
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