A number of real estate experts detected a 10 percent drop in apartment rentals in investment areas such as Salwa, Fahaheel, Mahboula and Fintas, and stressed that an increase of vacant newly-built buildings has helped reduce prices even beyond 10 percent in some cases.
However, the experts remarked that the new buildings were not the only reason behind the drop, adding that laying off and deporting thousands of expats had played a major role because this directly affected apartment buildings’ occupancy rates. In this regard, member of the real estate union Qais Al- Ghanem expected rent values in investment buildings to suffer an extreme ‘quake’ over the few coming months because of these three factors – layoffs, deportations and new buildings.
“Deported expats have left hundreds of apartments vacant and this has affected rent values,” he added, expecting that rental drops would soon prevail and include various areas around Kuwait, which made many owners and investors fish for opportunities to rent their buildings to ministries and government bodies in order to have secured annual contracts signed before rent values drop further.
Moreover, Ghanem expected that the new electricity and water consumption prices would force tenants to seek alternatives such as living in remote areas or sending their families back to their home countries.
Another wellinformed real estate source said that current statistics show that around 7,000 new apartments had joined the market over the past four months and expected the number to jump to 15,000 by the end of the year. “This huge number will have its negative impacts on increasing supply far beyond demand and the only solution will be reducing rent values,” he concluded.