Ministry of Commerce in talks with CBK, CMA on appraisal regulations

Officials at the Ministry of Commerce and Industry are considering introducing new regulations for real estate appraisal, particularly for companies and banks that include real estate assets in their budgets.

This initiative, according to Al-Rai daily, aims to improve the investment environment in Kuwait and ensure accuracy in real estate asset classification by commercial entities.
Discussions are ongoing with the Central Bank of Kuwait and the Capital Markets Authority to develop these new regulations, which will rely on updated valuation principles in line with market changes.

The Ministry is evaluating whether to adopt existing regulations from these authorities or introduce specific standards to enhance the competence of professional appraisers and increase accuracy and customer trust in the process.

The CBK and the CMA already use their own set of controls for real estate valuation. The Central Bank relies on entities like Kuwait Finance House and Kuwait International Bank for appraisals, while the Capital Markets Authority adheres to international accounting standards for asset valuation, including real estate.

Real estate appraisals generally involve determining rental income, market value, construction costs, and any factors affecting the property’s value.

The Ministry of Commerce plans to ensure that no transactions are approved until appraisal reports meet the new requirements, with a certificate of registration for approved appraisers who meet the Ministry’s standards.