Kuwait Real Estate News
Kuwait Property sector witnesses recession
Trading curbs and ownership restrictions are the cause behind slowdown in Kuwait property sector, when the property market at all other Gulf nations is booming thriving on windfall oil revenues.
The new building sites are still omnipresent in Kuwait, but several local investors are now searching for better opportunities elsewhere in the Gulf.
Despite pledges by the government to open up the realty market, foreigners are still not permitted to own property as in the other Gulf states as the UAE.
The property sales in Kuwait plummeted by 65 percent in July, witnessing a four month decline, followed by the restrictions placed on private firms by the state in the form of residential real estate deals, the biggest portion of total property transactions to tackle inflation.
According to analysts, the sector could see further decline if the government does not keep the sector open for private investors and offer more land for citizens.
The Chief Executive of National Real Estate Company, Khaleel Al Abdullah, commented that shortage of land in Kuwait is the main reason for the current problems faced, as against in other Gulf countries, where the prices of land in Kuwait have reached its maximum.
“There are no opportunities available in Kuwait, and due to this fact, several property firms are seeking expansion outside Kuwait. Where can the companies invest when there is no land available for investment?” he asked.
About 90 percent of land is controlled by state-owned Kuwait Petroleum Corp for oil exploration and other related projects.
The Central Bank Governor, Sheikh Salem Abdul Aziz Al Sabah, had requested the government to arrange for more land for citizens to tackle record inflation, which hit 11.1 percent in May, mainly due to surge by 14.9 percent in housing costs.
The Manager of real estate department at Tijara and Real Estate Investment Company, Mubarak Al-Saeedi, revealed that property market could be heading towards recession if the government does not promote private investors.
“The government should have given an opportunity to the private sector to develop residential property sector, rather than curbing it. The government had introduced regulations earlier during the year forbidding private companies from purchase and sale of residential units in Kuwait so as to control real estate prices and inflation. Apart from that, the recent restriction by the Central Bank on consumer lending further weighs on the residential real estate market and might hit the commercial sector badly,” he explained.
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