Unjustified Rise In Real Estate Prices In High End Areas
Category: Kuwait

Residential real estate prices are seeing an upward price trend in high-end areas in the recent period, which has raised many questions, especially since these areas recorded a price jump that reached 40 percent in some of their deals, while most of them ranged between 10 and 15 percent, reports Al Rai.

It is noteworthy that this price jump comes at a time when all economic sectors are witnessing a recession under pressure from weak liquidity, which has caused a tangible weakness in real estate transactions, and acceptable rises in some areas, while the rates of this jump exceeded the levels in the same areas before the coronavirus crisis.

In this regard, real estate sources monitored an unprecedented increase in the prices of private housing properties in the luxurious interior areas during the last period, especially in Shuwaikh, Abdullah Al-Salem and Al-Nuzha suburb.

Al-Rai daily, quoting sources, that the unjustified rise in real estate prices in high-end areas places invokes question marks, and raises speculation about the possibility that the purchase of real estate and other most expensive goods is likely due to money laundering.

The daily reports, quoting sources, that one of the suspicious price hikes is that at the end of the last quarter of 2019, a complex in Safat Square was sold for nearly KD22 million dinars, to be finally resold by more than 46 million, which means that the accountant recorded a growth of more than 100 percent in a year.

The alleged money launderers’ behavior allows them to accept entry at a high price and then exit even at a loss, with expectation that some real estate in these areas will witness additional increases during the coming period of approximately 20 percent.

In a related development, the Vice President of the Real Estate Brokers Union, a member of the Dispute Settlement Committee at the Ministry of Trade and Industry, Imad Haider, revealed that “the committee recently discovered  suspicion cases of money laundering hovering over a number of brokers, after checking their books.”

He pointed out that the committee “recently referred a real estate broker to the Anti-Money Laundering and Terrorism Financing Department after discovering that he had removed a number of contracts from the broker’s book, and he refused to disclose the nature of the transactions in those contracts.”

He also indicated that “it was noticed during the last period that some auctioneers rented their books or sold contracts from them.”



12 Aug, 2020 865
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