Housing Crisis Solution Cautiously Optimistic By Real Estate Experts

In the opinion of several real estate experts, mandating the Kuwait Municipality to allocate 18 sites to the Public Authority for Housing Welfare in a hurry will allow 160,000 housing units to be constructed in new cities, regions, and suburbs.

Separately, the experts told a local Arabic newspaper the government, the real estate developer, and well-studied financing are the key to solving the housing crisis.

Prior to allocating 18 sites, the government must overcome all obstacles, including the establishment of new clean energy stations, reconsidering the electric tariff, and providing only one subsidized house to each citizen to prevent traders from investing in residential property, as well as creating a system for reviewing all real estate decisions and laws.

Vice-President of the Real Estate Brokers Union, Imad Haidar, confirmed that the recent news about the government’s designation of 18 sites to become new areas and suburbs that include all governorates and cover all housing requests is a step in the right direction to solve the housing issue, but it must be followed by several supporting steps, the most important of which is the speedy completion of the infrastructure, and the provision of sufficient money by the credit bank to lend to 160,000 Kuwaiti families.

Haider considered that the huge amount of plots to be built may raise the prices of building materials and wages of labor and contribute to the increase in the inflation rate.

He stated that the distribution of building plots should be part of it directed to real estate developers and the private sector, and the other part is built through the Public Authority for Housing Welfare and the state, such as government housing, and the rest remains as it is currently in practice and is known as “land and loan.”

With regard to financing, Haidar stressed the need to find financing alternatives that support the credit bank, such as mortgage and real estate financing, taking into account the balance between the interest of the citizen on the one hand and banks and financing agencies on the other. This is in addition to creating a real estate system that reviews all old decisions and laws, and develop sustainable solutions.

Commenting on the allocation of 18 sites for the benefit of the PAHC, the expert in the local real estate market, General Manager of the Behbehani Towers Real Estate Company, Alaa Behbehani, said that the housing issue in Kuwait can only be resolved through a “triangle of 3 sides”, represented in the liberation of lands and developers. Real estate and bank financing thoughtful.

He added that there are several solutions and proposals to solve the housing issue, such as releasing lands and restoring the real estate developer’s system within strict laws that limit speculation.

Behbehani pointed out that the state annually pays about 170 million dinars as a rental allowance for citizens, and this amount will guarantee if it is used, in addition to the government’s support, to be an advance for development companies to build two-story houses in integrated areas similar to residential complexes or so-called “compounds” in Dubai and Britain provided that the value of the housing plot is determined by a financial amount in line with the income of its owner.

He believed that there are a large number of citizens who are willing to live in homes whose area does not exceed 200 meters in an integrated service area within two or three years, where they find a safe haven and a better and faster option for stability, instead of waiting for the “government house” for a long period of time ranging from between 10 and 15 years.

With regard to the real estate finance law, Behbehani said that the law, as currently proposed, mortgages the financed property, and in the event the owner fails to pay, the property is sold, disregarding previous civil laws, which prevent the sale of the only private housing, even if it is mortgaged.

He explained that the law in one of its articles allows local banks to sell the mortgage to a foreign bank without the approval of the loan holder, and this may get us into trouble, as happened during the global financial crisis in 2008, when foreign banks were allowed to own mortgaged properties in Kuwait.

Alaa Behbehani stated that opening the door to competition between real estate developers in the process of building and constructing residential areas, including infrastructure and services, will stimulate the local economy and save a lot of money on the state budget, and will also contribute to creating direct and indirect job opportunities for thousands of citizens, in addition to mobilizing all sectors.

The concerned economic sector in the construction and building sector, including the aluminum industry, engineering offices, contracting, sanitary ware, glass, electrical works, furniture and others.

The head of the development group, m. Khaled Al-Otaibi, stressed the need to overcome all obstacles before allocating the 18 mentioned sites for the benefit of the Public Institution for Housing Welfare.

Al-Otaibi said that the first of these obstacles that must be resolved is the establishment of new power plants, which preferably depend on clean energy, as stipulated in the Glasgow Convention COP26.

He pointed out that the second obstacle that is supposed to be overcome is to reconsider the electric tariff and allocate only one subsidized house for each citizen to rationalize state expenditures and prevent merchants from investing in residential real estate, and its low prices.

As for the third obstacle, Al-Otaibi pointed out that the real estate market includes many segments of society, whether low-income, middle-income or the rich.

Therefore, the authorities must adopt flexible legislation when introducing the “real estate developer”, in order to meet the needs of different segments of society, and take into account their financial conditions according to different payment systems that are commensurate with the circumstances and incomes of each citizen.

Eng. Khaled Al-Otaibi stressed the need to establish governmental companies and establish new factories that meet the needs of building in the new cities to be established and serving the region of origin in economic and social terms in terms of securing building materials at competitive prices and providing job opportunities for many young citizens. The Latest and important news on our Telegram Channel click here to join

Al-Otaibi called for tightening control over the prices of building materials and not exploiting citizens by some companies and contractors during building orders to avoid fraud, as had happened previously in the contracts for citizens' plots in Al-Mutlaa.

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