Kuwait's Real Estate Prices Continue To Decline Slowly

There is still stagnation in the private housing market, as evidenced by the continued decline in residential real estate prices during the first quarter of 2023, according to Al-Qabas daily. Increasing interest rates, the global economic crisis, and other factors contributed to the decline of real estate prices, which had reached unprecedented levels in previous years. Starting from the fourth quarter of 2022, private housing prices continued to decline at a slow pace across the country, according to Al-Hesba Real Estate Company - four percent lower than the third quarter. Six percent decline was recorded in the first three months of this year.

According to the data, the declines varied from one percent to ten percent in the first quarter of 2023: one percent to five percent in Faiha, Kaifan and Qadisiyah; five percent to six percent in South Surra; six percent to seven percent in East Qurain, Ishbiliya and Andalus; and eight to ten percent in Saad Al-Abdullah and Khairan.
It is noteworthy that the value of transactions on the private housing real estate market decreased significantly during the first quarter of 2023, falling 38.3 percent from KD364.02 million in the fourth quarter of 2022, and 49 percent from KD439.54 million in the first quarter of 2022.

There were 432 private housing deals in the first quarter of 2023 compared to 694 in the fourth quarter of 2022 - a decline of 37.7 percent, while it dropped 52.4 percent from 908 in the same period last year. The aforementioned data include only real estate properties sold at a rate of 100 percent, excluding Sabah Al-Ahmad Sea City. Real estate stagnation in the country is caused by several factors:

- A high interest rate decreased the demand for real estate purchases and negatively affected investor liquidity.

- The global economic crisis and geopolitical situation that led to anticipation and caution among real estate agents.

- The decline in the purchasing power of citizens with the stability of salaries of a large segment in light of the rising inflation rates.

- Some citizens prefer to keep cash in light of the uncertainty of economic conditions in general.

- The decline in the attractiveness of real estate investment in light of the migration of capital owners towards bank deposits with high and guaranteed returns.

Despite the repercussions of the global economic crisis and successive rises in interest rates in most of the internal areas near the capital, or the Golden Square, which includes Shuwaikh Residential Area, Dahiya, Shamiya and Nuzha, the prices of residential real estate remain steadfast in general.

The consistency of real estate prices in the internal regions is due to the scarcity of land in exchange for an increase in demand for housing units, as well as the lack of new housing cities that are similar to specifications that are attractive to citizens. This is in addition to the fact that those wishing to buy properties in internal areas among the affordable category usually depend on personal financing, not on borrowing from banks.

Deals in these areas are often witnessed at record rates. A group of specialists (18 years of experience) in real estate established Al Hesba Real Estate Company in 2016 in order to provide real estate services with the required transparency through the use of the best modern technology solutions. The company provides innovative ideas to all stakeholders through better access to information and analysis about the local real estate market.

 

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