Apartment Rents Are Dropping Weekly!
Category: Kuwait
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Real estate experts have confirmed that the Coronavirus pandemic has hit the investment sector, leading to falling rents and impacting real estate owners whose monthly revenues have been affected due to the decline, shrinking demand, and high vacancy rates, Al Qabas daily reported.

They told Al-Qabas that apartment rents in some areas dropped significantly by more than 30%, as the rent for the two-room apartment with electricity and water had fallen to KD160 dinars, pointing out that the rent decrease in some areas is falling on a weekly basis.

The consultant and economic researcher Amer Dhiab Al-Tamimi said that in light of the current developments in Kuwait due to the Coronavirus pandemic and its unfavorable repercussions on the performance of various economic sectors, the real estate sector has been particularly impacted by many factors. He pointed that a number of companies and organisations have let go workers, who have in turn failed to pay rent dues for their apartments, or expats have sent their families back to their home countries and moved to apartments for singles or have departed from the country permanently.

These combining factors contributed to the owners of residential buildings starting to feel the dilemma of declining revenues and the rise in vacancy rates in these buildings, he added, that these residential buildings require review, which means determining lower values ​​than they were a year or more ago.

Al-Tamimi pointed out that with many expatriate workers losing their jobs, especially those with middle incomes, and other choosing to return to their home countries, that means more apartment vacancies, and the vacancy rate may rise to a level that may exceed 30 percent. In this case, investors will stop constructing new residential buildings and will stop acquiring many lands for constructing buildings, therefore, prices are expected to decline, he added.

Al-Tamimi noted that if the government works to implement new procedures regarding residency visas, and tries to control the number of expatriates in the country, and to amend labor market conditions and demographics, the demand for investment housing will decline, as these factors will lead to lower prices. But is there a possibility for the economic conditions to recover and the demand for expatriate workers? This is a possibility that should be taken into consideration when looking ahead, but the ongoing economic changes do not indicate the possibility of a rapid recovery.

 

SOURCE : TIMES KUWAIT

23 Feb, 2021 0 2166
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