The investment real estate sector, which relies heavily on expatriates, is experiencing increasing pressures day by day, not the least of which is the departure of many expatriate workers from the country since the beginning of the Corona pandemic for losing their jobs, in addition to the fall of the residency of a large number of them while they are outside the country, which has generated a deep vacancy crisis. Rents are placed on the discount rail.
On a tour of some areas, it became clear that almost no building is devoid of vacant apartments for rent, even in places that are classified as strategic, such as Salmiya and Hawalli, which are usually very popular with tenants, while the observations confirmed the existence of entire buildings empty of residents. In areas such as Mahboula and Khaitan.
Real estate experts told Al-Rai that the real estate market in Kuwait, especially the investment sector, is undergoing radical changes caused by the Corona crisis, which lost thousands of their jobs and pushed them to leave the country and evacuate their apartments, in addition to the fall of tens of thousands of residency permits outside the country without being able to return to Kuwait.
They added that among the decisions that constitute pressure on the investment real estate sector is also not to allow the renewal of the residency of those who have reached the age of 60 years and who do not hold a university degree, in addition to government directions to reduce the number of arrivals in the short and medium term in large numbers, noting that this predicts that «the investment sector may He faces worse conditions soon; building prices are raging and rents plummeting, by not a few.
The experts pointed out that the market witnessed a decline in rents during the last period, ranging between 15 and 20 percent in distinct areas such as Salmiya and Hawalli, where the rent for the room and hall was 230 dinars, while it is now rented at 190 dinars, while the apartment consisting of two rooms and a hall was leased at 280 dinars And now at 240 dinars, stressing that the decline rates do not reflect vacancies on the ground, as many clean owners of debt resist the idea of reducing the rent even if a lot of apartments are vacant, and they follow a policy of "biting fingers" until we know where things will go.
The people of the market explained that the rate of rent decline in areas such as Mahboula and Khaitan reached 25 percent in light of the vacancy of entire buildings, as the rent for the apartment consisting of one room and a hall reached 140 dinars, down from 190 dinars, while the rent of the two rooms and hall decreased from 260 to 190 dinars. The justification for this is that most of the buildings in those two areas are mortgaged to the banks, so the owners are racing against time to fill vacancies in any way.