During The Past Six Months, Private Housing Real Estate Has Increased

Despite price inflation hitting record levels and causing a decrease in trade volume and rates, the Kuwait International Bank (KIB) reported that the private home real estate industry in the governorates of Kuwait saw a relatively modest gain over the last six months compared to last year. According to KIB's semi-annual real estate report, Kuwait's private housing market continued to grow at a cautious rate over the first half of this year, when rates of price growth relative to the previous year varied between 4.7% and 6.1% for various governorates

The data in the report showed that prices varied at different rates for each governorate between the end of 2021 and the middle of 2022, with Ahmadi experiencing the highest rate of change in the increase in primary prices per square meter during that time and Mubarak Al-Kabeer experiencing the lowest.

In light of the housing crisis, there is a dearth of supply due to a lack of land and suitable locations, especially with the allocation of plots in relatively remote areas. This offsets the steady increase in demand, which coincides with the growth of the population.

Additionally, he cited the continued speculating and investment in residential real estate as one of the causes for this slowdown in the rates of increase in private housing, in addition to the ongoing infrastructure projects in the new residential areas.

According to the report on real estate registration contracts for the first five months of this year, there were 2,693 total contracts registered, with the private housing sector accounting for the majority of those with a rate of 74.68%. The investment sector also saw a discernible rise in trading rates.

Demand

The current relative demand is a result of people moving back to the nation following the effects of the health crisis, as well as the passage of rules that will stabilize the occupancy rate of the units and prepare for future increases in rent. Focusing on the transactions of private housing real estate in the governorates of Kuwait, the KIB report revealed that the Ahmadi Governorate led its movement by 43.7% of the total contracts registered for private housing properties in the previous six months. The person who explained this did so by citing an increase in trading and demand for land and housing in the Sabah Al-Ahmad coastal area, noting that it serves as a place for residents to engage in leisure activities, and adding that it also serves as a recreational outlet, pointing out that despite the high cost of land in and around the interior regions, as well as the high cost of basic building materials like iron, cement, aluminum, and others, not to mention the cost of labor, villas, and houses in some areas of the Ahmadi Governorate are still within the reach of a significant portion of the population.

According to the report, land prices in the residential areas of Shuwaikh, Al-Siddiq, Saad Al-Abdullah, Al-Masayel, Ishbiliya, and Al-Aqeelah recorded the highest average price per square meter of any region, while land prices in the residential areas of Sulaibikhat, Salwa, Al-Waha, Sabah Al-Salem, Khaitan,

The individual stated that despite a relative gain in prices for private housing in the first half of the previous period, prices are anticipated to decline in the following period due to a number of indications, including:

• The increase in the price of private houses and the cost of construction materials to the point that they are no longer within the means of a sizable portion of the population.

• The new Saad Al Abdullah residential suburb extension, will boost the availability of housing units.

• As compared to the first half of 2021, there were 51.33% fewer recorded deals.

• The central bank's most recent increase in the discount rate.

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