Demographic Balancing Leaves One In Three Apartments Empty

Latest statistics on the real estate sector in the country by the Public Institution for Civil Information (PACI) reveals that of the show the total number of apartments in all governorates is about 346,752 total apartments in all governorates, 105,897 remain vacant as of the end of December 2020, which translates to around one in three apartments in the country being empty.

According to the statistics, Hawalli Governorate topped the list of vacant apartments with 40,514 of the total 142,951 apartments in the governorate left vacant. This was followed by the Ahmadi governorate with a total of 89,000 apartments of which around 20,000 are vacant, and in third spot was Farwaniya governorate with a total of 82,293 apartments, of which 18,990 are vacant. In fourth place was Capital governorate with a total of 15,303 apartments of which 4,755 were vacant apartments.

In the penultimate position, is Mubarak Al-Kabeer Governorate with 9,287 apartments, of which 6,404 are empty, and finally, Jahra Governorate, with a total of 7,763 apartments, including 1,517 empty.

The increase in the number of vacant apartments in Kuwait is closely linked to the government policy of achieving a demographic balance in the population structure through Kuwaitization of public and private sector jobs and discouraging the issuance of new visas to foreigners that began a few years ago. The situation worsened with the outbreak of the COVID-19 pandemic that led to the departure of hundreds of families from Kuwait, which severely impacted the real estate sector.

Many residential property owners have reduced rents by 15 and 25 percent in some areas in a bid to retain tenants and attract new ones, especially since most of the owners have to meet their loan repayment obligations to the banks. In his remarks on the dire circumstances facing the real estate sector, Secretary of the Kuwaiti Real Estate Union, Qais Al- Ghanim, said that the increase in the number of vacant apartments is “an expected outcome and results from the state’s implementation of the policy of adjusting the demographic structure.”

He explained the coming years will see more vacant apartments, especially since most of the expatriate workers who live with their families will leave for their home countries for vacation and most of them will return without their families and this will not only negatively reflect on the real estate market, but also on all other markets, including the foodstuffs, clothes and cars.

He added that while it was difficult to determine the rate of decline in housing rents, what can be mentioned is that the real estate market will continue to witness further decline in the coming years with the continuation of the policy of adjusting the demographic structure.

 

SOURCE : TIMESKUWAIT

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