June 29, 2022 real estate

Kuwait govt’s hold over lands spurs real estate price increases: Unionist


KUWAIT: A recent study indicated that the average citizen in Kuwait needs around 16 years to repay the amount of financing granted to buy a house in Kuwait in monthly installments to the government, according to Marmore Mena Intelligence, part of Kuwait Financial Center Company (Markaz).

The housing issue has become a deep and complicated one, especially with the presence of around 140,000 housing requests in Kuwait in 2021, which require around KD 28 billion to realize, according to former housing minister Adel Al-Sabeeh.

Kuwait Times spoke to former secretary of the Real Estate Union Qais Al-Ghanim to discuss the housing issue in Kuwait. “The housing issue is facing several problems in Kuwait, the most important being the government not passing a law that supports the ‘release’ of residential land to prevent the continuous rise in real estate prices,” he explained.

“Prices are rising as there is no upgrading of laws to match the current situation, such as the real estate development law and real estate financing law, especially with the lack of lands,” Ghanim pointed out. “The government is not interested in resolving the housing issue and does not consider it a priority,” he added.

The study indicated the average price of residential properties in Kuwait is 15.8 times the average annual income of a citizen, higher than the average price of housing in Dubai (4.4), Abu Dhabi (4.5) and Riyadh (2.8), and even higher than the most famous and desirable locations in the world such as London (14.5) and New York (9.9).

Ghanim commented about the reasons for the difference in real estate prices compared to other countries. “These countries have legislation and laws that support providing land to the private sector to develop and build projects, while in Kuwait such laws did not pass,” he said.

Ghanim spoke about solutions to the housing issue. “In order to resolve the housing issue, the only solution will be through the government ‘releasing’ housing land and passing laws to organize the process to increase supply,” he said.

“The National Assembly has also restricted the role of the private sector in the private housing business by issuing laws that limit private companies dealing with housing land or building houses in private housing areas under the pretext of limiting speculation or monopolies and controlling prices. But these laws achieved nothing, and the current prices confirm this,” Ghanim said. “These laws have failed the housing issue due to the lack of specialized studies and research.”

Ghanim pointed out the government has not conducted extensive studies and research that provide real solutions for the housing issue, adding the government has no intention to resolve the housing issue due to the spending pressure and providing streets, buildings and services to the new areas.

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