A report released by Kuwait Finance House (KFH) has highlighted the stabilization of occupancy rates across various tiers of investment real estate. These rates remained consistent with previous figures, ranging from 85% to 88%. The report also detailed the average rental value of a two-bedroom apartment with a hall, spanning an area of 60 square meters. This value, at the governorate level, stood at 278 dinars at the close of the second quarter in 2023. Notably, this figure showed no change from the first quarter of the same year, with a marginal decrease of 0.1% over the course of a year.
The escalation in average rental values displayed variance across different regions and governorates. For instance, within the Capital Governorate, the average rent reached 313 dinars. This represented a quarterly surge of 4%, aligning similarly on an annual basis, reports Al-Anba daily.
The increase was particularly prominent in numerous investment areas within the governorate, such as a 5% rise in the Dasman area and a 1.6% increase in Bneid Al-Qar on an annual basis.
In the Hawalli Governorate, the same property type commanded a rental value of 306 dinars, marking a 3.4% quarterly ascent and a 2.7% annual rise. Similarly, the Salmiya region observed a 1.7% annual growth, reaching an average value of 305 dinars. In the Hawalli region, the rental value attained 278 dinars, exhibiting a 2.8% annual increase. Notably, Jabriya experienced a 1.6% annual upswing, with the average rate climbing to 315 dinars.
In the Farwaniya governorate, the rental value stood at 279 dinars, reflecting a 1.6% quarterly and 1.1% annual growth. Meanwhile, the Farwaniya region saw an annual surge of 1.9%, establishing the average rent at 273 dinars.
For two-bedroom apartments paired with a hall and ranging from 70 to 74 square meters, the average rental value in Kuwait surged to 315 dinars, reflecting a steady 2.1% annual increase. In the capital, this value rose to 343 dinars by the conclusion of the second quarter in 2023. This marked a quarterly escalation of 3.6% and mirrored the same percentage on an annual basis.
Hawalli Governorate experienced a quarterly surge of 3.1%, translating to an average rental value of 336 dinars. Annually, this represented an uptick of 2.5%. Additionally, the rental value increased annually for select investment areas within the province, reaching 335 dinars in Salmiya and 308 dinars in the Hawalli region.
In Farwaniya Governorate, the average rental value reached 309 dinars, reflecting a 1% annual increase. The Al-Riqqa region within the same governorate witnessed a 1.5% annual rise, bringing the average rental value to 335 dinars.
It’s important to note that rental prices vary based on factors such as location, design quality, finishing, and property age. New properties, which tend to have higher prices, exert pressure on the rental values of older properties in the market. As a result, landlords may increase rents for new tenants when vacancies arise.
Evaluating rental values requires consideration of the overall real estate landscape. Certain areas like Al-Shaab, Al-Mirqab, Bneid Al-Qar, Sharq, and others hold distinct status, influencing rental prices. Conversely, less distinguished areas include Jleeb Al-Shuyoukh, Abu Halifa, and Khaitan.
The phenomenon of furnished real estate has gained traction, especially for upscale properties, impacting rental values based on different levels. An interesting development is the expansion of rental demand in inner areas where Kuwaiti citizens reside, driven by elevated real estate prices.
Rental values fluctuate across residential areas due to various factors. In the second quarter of 2023, most areas saw annual variations. With a slight decrease in private housing prices, a commensurate reduction in the rental value of this real estate category was observed.
The anticipation of housing allocations prompted a significant portion of citizens to opt for private housing rentals. This led to an increased supply, particularly in areas close to workplaces and shopping centers. This uptick in demand stimulated the rental market for this real estate category.
In terms of private housing, the average rental value for a three-bedroom apartment with a hall spanning 135 square meters, stabilized at the governorate level. Within an area of 400 square meters, the average rental value reached 482 dinars by the end of the second quarter in 2023, remaining unchanged from the previous quarter and declining by 0.4% on an annual basis. In the Capital Governorate, the average reached 570 dinars.
Subsequently, the average rental value witnessed a 0.8% decline by the close of the second quarter in 2023. This followed a growth of 11.6% during the same period in the previous year. In Hawalli Governorate, the value settled at 516 dinars, indicating a 0.7% annual decrease.
For Farwaniya Governorate, the average value dipped to 397 dinars without experiencing a quarterly change, yet marking a 1.9% annual increase. The Mubarak Al-Kabeer Governorate reported an average rental value of 437 dinars for the same area, representing a 0.8% annual increase. Al-Ahmadi maintained an unchanged average value of 375 dinars on both a quarterly and annual basis. Conversely, in Jahra Governorate, the average price of 345 dinars indicated a 0.7% quarterly and annual decrease.
The rental value for an entire ground floor of a private housing property, spanning 400 square meters, averaged at 890 dinars. This represented a slight 0.1% increase compared to the first quarter of 2023, alongside a 0.5% decrease on an annual basis. Within the Capital Governorate, the value reached 1,045 dinars, showcasing a 0.9% annual decline. In Hawalli Governorate, the value of 953 dinars marked a 0.5% annual decrease. Meanwhile, the Farwaniya Governorate observed a slight 0.9% annual increase, reaching an average of 736 dinars.
The average rental value for the first or second full floor of private housing properties, spanning 400 square meters, recorded 790 dinars at the governorate level. This exhibited a minor quarterly increase, juxtaposed with a 0.6% annual decline. Within the Capital Governorate, the average rental value reached around 945 dinars, signifying a 1% annual drop. Notably, areas such as Adailiya and Al-Rawdah reported higher values of 1,100 and 1,000 dinars, respectively, while the more affordable Granada area exhibited a rental value of 800 dinars.
Sulaibikhat reported an unchanging average rental value of 600 dinars annually, while the Hawalli Governorate indicated a 0.6% annual decrease, reaching 853 dinars. In Farwaniya Governorate, the value of 636 dinars in the second quarter of 2023 marked a 2.7% decrease from the first quarter of the same year. Despite this, it still managed a 1% increase on an annual basis. Notably, the highest average rent in the governorate for this category of private housing was recorded in Seville, at 720 dinars. In most areas of the province, the rental value remained around 600 dinars.
The KFH report also highlighted that the average commercial rent value for ground floor spaces was 23.6 dinars per square meter. This represented a 6.7% annual decrease, while showing no change on a quarterly basis. Rental rates ranged from 10 to 26 dinars across most areas at the governorate level. In distinctive locations, this figure reached 29 dinars. In the downtown area of the Capital Governorate, the average reached 29 dinars per square meter, marking a 3.3% annual decrease for the second consecutive quarter. The Hawalli region reported a value of 26 dinars, down by 5.5% annually, while Salmiya exhibited a decrease of 3.4% annually, settling at 28 dinars. Farwaniya and Khaitan reported figures of 29 and 25 dinars, respectively, indicating annual declines of 6.5% and 12.3%.