Rent values fall by 13% amid apartment glut

KUWAIT: There are currently 49,130 empty flats in Kuwait and 26,466 others under construction; thus more than 75,000 units need to be “absorbed” by the domestic property market in 4-5 years, according to the Kuwait Real Estate Union. The proportion of occupied property units amounted in the current year to 86.8 percent, dropping by 8.2 percent compared to the past five years – which had soared to 95 percent, said Ahmad Al-Dewaihees, the union’s secretary general at a news conference.

Average monthly rent dropped from KD 278.9 (approximately $920.3) to KD 242 ($798.6) – 13.2 percent – said Dewaihees, citing a report prepared by the union (Al-Murshed 2017). The report includes a survey covering a sample of 162,576 apartments in 5,695 plots in 19 locations. It studied 875 plots, including 26,466 under-construction residential units in all districts, in addition to 13,535 completed ones, where the proportion of new units amounted to 6.6 percent of the plots.

The rate of expatriates’ population growth, which reached 4.8 percent over the past five years, dropped by two percent in 2017 and will fall by 1.5 percent in the coming five years. As to ownership flats, transactions exceeded 1,000 in 2007 and 2008. Following the global economic crisis, they ebbed by 2012. However, the market recovered, with 973 transactions in 2015, but dropped to 671 in 2017. – KUNA