ShareBy Majd Othman
KUWAIT: Statistics published in 2021 by the Kuwait Real Estate Union showed there were 61,000 vacant apartments in Kuwait, compared to 335,100 occupied flats that constituted 84.6 percent of total apartments. "Prices in residential areas are stable and even rising, while investment areas have witnessed a fall of 10 to 15 percent in rental value," real estate expert Sulaiman Al-Dulaijan told Kuwait Times.
Sulaiman Al-Dulaijan"Between 80,000 and 100,000 expats left the country during the pandemic due to several economic factors, which affected rental values in investment areas. The slump did not affect citizens in residential areas due to the stability of their income during the pandemic," he said. Dulaijan mentioned the average rent for a 60 sqm apartment in Hawally governorate is KD 270 to KD 300.
"High-quality decor, services, location and the availability of parking spaces impact the value of the rent, which can increase to KD 400 or higher," said. "We have only a tenancy law that governs the relationship between the owner and the lessor, otherwise there is no official party in Kuwait that determines the rental value," he added.
"Despite a 10 to 12 percent fall in investment apartment rents in the last six months, prices are still high according to the area and lack of services in investment buildings," real estate broker Salem Al-Barki told Kuwait Times. "Meanwhile, prices in residential areas are still maintaining their high prices, and demand has increased due to the better services provided, such as parking lots and free water and electricity," he said.
Barki explained that although residential areas have better services, many tenants are facing strict conditions despite agreeing to pay high rents. "Even if the tenant accepts a high rent, they are facing problems with owners regarding the number of people allowed to live in the flat. Some of them refuse to rent to families with more than one kid, or to divorced women, even if the lessor is a Kuwaiti," he said.
Regarding the apartment pricing method, Barki said: "It depends on several elements including market price, supply and demand, owner's pricing and agreement between the parties. Entities that are responsible for the real estate sector can help reduce the units' prices by passing a law that sets the price of the apartment according to the area and the services provided with the investment."
Regarding the reason for high rents in residential areas, real estate office employee Abu Ahmad told Kuwait Times that "lessors have started to increase rents in residential areas more than investment apartments, which led to rising demand on residential properties and higher prices". He said prices saw a slight decrease in investment areas. "But based on the apartment space, rental prices are considered high," he said.
"After a slight decrease in apartment rentals, the average rent for a 60 square meter flat in Salmiya is KD 360 to KD 380 per month. As for residential apartments in areas such as Rumaithiya, it is between KD 500 and KD 550 per month," Abu Ahmad added.
Violations
Abu Ahmad told Kuwait Times about the violations committed by real estate owners. "The Municipal Council determines the size of the apartment, but after the electricity is connected to the property, the owner divides the apartment be become two apartments instead of one, and prices them as if it is one big apartment, which leads to high prices," he said. "The Municipal Council obligates property owners to provide tenants a parking space in the basement, but after they get the building license, they transform it into storage areas and rent them to outsiders, while ignoring the tenants' needs for parking spaces."
Another real-estate office employee, Mustafa Ahmad, said a lack of construction workers led to a rise in their daily wages and eventually increased the contractor's total cost. "Ultimately, his issue affects rental prices, but tenants can still rent according to their budget. Despite a lack in the services provided to lessors, prices are not low," he said.
