Kuwait Real Estate News
Reports offer contradictory views on status of Kuwait realty market
Ever-since the government placed restriction in 2008, banning private firms from purchasing existing property in Kuwait, the real estate sector in Kuwait has suffered drawbacks.
Confusion still prevails over the recovery of the market, with latest official figures indicating 8.6percent increase in sales during the past one year until end of August, although another independent report had described the sector as being ‘stagnant’, and having suffered price falls up to 40 percent during the last nine months.
According to official figures, property sales in Kuwait rose to $337.2mn, with the residential property transactions recording maximum increase of 31.2 percent, in comparison to August 2008.
Property sales, particularly those of residential units, had been declining ever-since the government imposed restriction in 2008, aiming to prevent unjustified increase in prices.
A stable economic backdrop, coupled with easy financing conditions, will help the real estate market to push of historic lows. The property market activity is hoped to strengthen further in 2010, said the report by National Bank of Kuwait.
It particularly speaks about the impact of the recent legal law, which permits Islamic financial institutions to trade in residential property. The Kuwait Finance House (KFH), the Islamic lender, won a verdict against the Ministry of Justice, which will make way for it to finance private real estate investments.
Meanwhile, a new report from Al-Mutakhasses Real Estate Company said that real estate prices in Kuwait has reached ‘intolerable’ levels with demand for homes, being lower than during the same period last year and mentioned that a short-term recovery is unlikely.
The Company Chairman, Faraj Al-Khudari, said that the government should offer incentives to boost the stagnant property market.
Following the global economic crunch, prices have reached an intolerable phase, wherein they are equivalent to the cost price, he pointed out.
Several businessmen have restricted their activities to just monitor the market, rather than entering into deals, and therefore the transactions may drop further during rest of the year, the report predicts.
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