Kuwait Real Estate News
Rentals plunge during the first quarter of 2009 in Kuwait
During the first quarter of 2009, the property sector in Kuwait has witnessed a period of instability during the first quarter of 2009, says a leading expert in Kuwait.
Although the demand for housing units decreased considerably, the supply of units into the market continued at the normal pace, which had eventually caused this apparent imbalance in the property sector, says Youssef Al-Alyan, Director of Real Estate and Evaluation Department of Al Mishkat Real Estate Group.
In fact, with the current economic crunch, the demand has dropped so low that few new apartment buildings have been literally vacant. Thus the rents plummeted, while the volume of sales too plunged, Al-Alyan said.
The rents for residential and investment units decreased sharply with the land lacking all kinds of services or infrastructure facilities. The prices of investment properties dropped by 20 percent, which indicates that even larger losses are likely during the coming months.
The drop in rents has been apparent in major residential areas such as the Hawally, Salemyia, Mahboula and Farwanyia. Few landowners have even offered additional benefits to tenants such as exemption from paying water/electricity fee, to prevent them from vacating the premises. However, in the internal areas, the rentals were comparatively stable.
During this period, a five-room apartment was sold for KD100,000 as per the specifications set by the Credit and Saving Bank, while the rental for a similar apartment dropped to KD500 from KD750, during the same period, said Al-Alyan.
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