The rents of apartments are starting to decline from the Tenth Area (outskirts) to Farwaniya, Salmiya and Hawally areas especially with the presence of hundreds of empty apartments in these areas.
The decline in rents has led to suggestions of annual renewal of rent contracts and allotment of ceiling in hikes as applied in Dubai, reports a local daily.
A member of Union of Real Estate Owners Qais Al-Ghanim said the rents in Kuwait will not increase again in the near future, adding that analysis of the market has indicated a decline in the rents from Tenth Area to inner areas occupied by expatriates in Farwaniya, Hawally and Salmiya.
He revealed that many expatriates have sent their families back to their countries out of fear of increasing rents of apartments while investors in the real-estate industry have started selling off their assets, which are among the reasons for the declining rents.
Al-Ghanim explained that the realestate investors will face additional pressures when the interest rate increases because some of the investors bought real-estate through banking subsidy under certain prices.
Therefore, their revenues will reduce with increase in interest rate, due to which many are selling off their investments to avoid risks.
In the same context, sources revealed that the rent of a one-bedroom apartment has reduced from KD 230 to KD 210 while the rent of a two-bedroom apartment has reduced from KD 370 to KD 340.
They added that the demand for renting residential apartments will decrease by 60 percent compared to last year, a development which worries real-estate companies.