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Drop In Prices Of Private Housing In 2022, Mistaken Belief: Al-otaibi
The series of crazy rises in the prices of the private housing sector that has been going on for years now has reached its peak, although the prices are expected to drop in 2022, after the sector showed its ugly side during the Corona crisis.
In a statement to Al-Qabas real estate experts said next year the private housing prices should drop by 20 to 40 percent, depending on the region and residential areas, supported by the principle of supply and demand, while some real estate sources say private housing prices may continue to rise next year for several reasons.
For example, abundant “cash” flow, postponement of loan installments, low interest rates on loans, in addition to a large segment of individuals who find private housing a safe haven for their money, and prefer investing in the real estate market over other economic sectors in the country. Also among the reasons — according to the sources — is the lack of optimism about the state releasing more plots of land in the short term, and this has encouraged speculators to switch to the residential sector instead of the ‘investment’ sector since the former is expected to bring in quick returns.
Real estate expert Suleiman Al-Dulaijan expected calm to dominate private housing during 2022, with a slowdown in the growth of its prices compared to previous periods but was quick to add, the prices of private housing during 2021 increased in some areas by approximately 30-40%, as happened in the fifth phase of Sabah Al-Ahmad Marine City, while it was lower in other areas, in which the increase was estimated between 20 to 30 percent, and those prices vary according to the region and location.
However, Al-Dulaijan attributed the rise in private housing prices mainly to the increase in demand and the lack of supply, the lack of other investment opportunities, and speculation by investors due to the high demand for purchase, in addition to the developmental reasons related to real estate for sale or to create additional sources of income. He added, among the reasons for the rises was also the drop in interest rates by the Central Bank of Kuwait to unprecedented levels, which in turn encouraged many individuals and investors to take out their money and use it to buy a residential property, which reflected a significant increase in prices during the last period.
For his part, the head and official spokesman for the Al-Mutla’a Peoples Committee, Eng Khaled Al-Otaibi said the belief that private housing prices will fall during 2022 is a ‘mistaken belief’, due to its high and continuous revenues.
Al-Otaibi added, in a statement said requests for allotment of housing at Public Authority for Housing Welfare annually are about 8,000, while what is disclosed is “almost negligible” and this confirms the belief about the continued rise in prices in Kuwait during 2022 in light of the slow implementation of housing projects and the distribution by the lottery system, in addition to the failure to implement the infrastructure of projects at the required speed.
He stressed the need for the private sector to participate in solving the housing problem, which in turn will lead to a decrease in prices in the private housing sector to acceptable levels, by working to implement government projects, so that all citizens can obtain their right to residential care, instead of devouring more than one-third of the salary to rent apartments in light of their inability to buy a ‘lifetime house’ or land to build on.
Al-Otaibi said that residential care plays a major role in reducing the prices of private real estate, by securing housing for citizens urgently through the implementation of projects in suburbs and very small areas whose implementation is quick and bears fruit, along with the distribution of houses in large cities or giant projects that require some time to complete.
A real estate source told Al-Qabas the interior areas (close to the Capital) suffer from scarcity of land offered for sale, and not only the lack of supply, as the average price per square meter has increased in the areas of the capital governorate, including Shuwaikh residential, Abdullah Al-Salem suburb, Shamiya, Faiha, Adailiya, Kaifeng, and others.
The prices of private housing real estate witnessed significant jumps, rising to nearly 19% at the end of the third quarter of this year, compared to the same period last year. Al-Shuwaikh residential topped the list of the most expensive residential areas in the Capital Governorate, with a rise of approximately 11%, with a range of 8.4% and 7.5% in Al-Nuzha and Granada, respectively, while the average price per square meter in private housing in the Hawalli Governorate jumped to 1,100 dinars, while it rose to 712 dinars in the Farwaniya Governorate according to recent real estate data.
SOURCE : TIMESKUWAIT
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