Effect Of Housing Crisis In Kuwait

12 February 2024 Kuwait

Since the enactment of the anti-monopoly law on vacant lands at the end of last November, discussions have ensued within real estate circles and among citizens regarding its potential effectiveness in addressing the housing issue.

More than two months after its implementation, questions persist about its efficacy in curbing residential property speculation, particularly as the number of pending residential applications exceeds 91 thousand. While some view the law as a positive step, others argue that it needs to be complemented by supportive legislation such as mortgage laws, developer regulations, and housing city initiatives, reports Al-Qabas daily.

The anti-monopoly law imposes an annual fee on un-built private housing plots exceeding 1,500 square meters, with the fee incrementally rising to discourage land speculation.

However, its impact remains subject to debate, with some real estate agents expecting a decline in property prices as a result of the law, while others maintain that it alone will not be sufficient to alleviate the housing crisis.

Consequently, Ibrahim Al-Awadi, head of the Real Estate Union, has emphasized the need for a comprehensive approach, suggesting that the law should be accompanied by other measures such as taxation on multiple property owners and the promotion of real estate development and mortgage systems. He acknowledges that while the law has led to price decreases in certain areas, sustained efforts are necessary to balance supply and demand in the market.

Suleiman Al-Dulaijan, a real estate expert, expresses skepticism about the law’s effectiveness, pointing to previous instances where similar measures failed to reduce property prices. He argues that supply and demand dynamics are the primary drivers of real estate market fluctuations, suggesting that the law’s impact may be limited without addressing broader economic factors.

Imad Haider, head of the Real Estate Brokers Union, criticizes the law’s focus on individual landowners, arguing that it fails to target large-scale land monopolization effectively. He contends that market regulation should be the primary focus, rather than attempting to manipulate prices through legislative measures.

Abdulaziz Al-Daghishim, another real estate expert, predicts potential loopholes and unintended consequences of the law, including increased manipulation of land prices and legal disputes over ownership. He suggests that the government should address the underlying issue of land scarcity by liberating state-owned lands for sale to citizens at reasonable prices.

Tawfiq Al-Jarrah, also a real estate expert, deems the law unjust and calls for government intervention to regulate the real estate market and provide affordable land options to citizens.

He warns against allowing the market to outpace economic growth and stresses the importance of maintaining market balance.

Overall, while the anti-monopoly law represents a step towards addressing land speculation in Kuwait, its effectiveness in mitigating the housing crisis remains uncertain without complementary measures and broader economic reforms.

: 247

Comments Post Comment

Leave a Comment