A drop in the rents of investment apartments by about KD 60 has been witnessed in the last two months especially after the issuance of governmental decisions that affect tenants such as increase in electricity and water tariffs, and fuel prices.
In areas like Salmiya, rents have reduced from KD 400 to KD 320 and from KD 360 to KD 300 at a time when rents usually soar due to the end of summer holidays and advent of the school year.
However, it seems this year the rents are falling, which is considered as a relief following an irrational surge in rental values that was witnessed in the realestate market in the previous years. Secretary-General of the Real Estate Union Qais Al-Ghanim, who had anticipated the current fall in rents, linked this phenomenon to the drop in the value of investment lands by 30 percent in many areas such as Hawally, Salmiya and Farwaniya.
He also linked the fall in the rents to increased availability of apartments which has started exceeding the market demand, indicating that the rent of a twobedroom apartment is expected to cost less than KD 250 in the coming few months. Al-Ghanim said the landlords are waiting for September and October for their current empty real-estate to be occupied, indicating that the demand will not be high and the rents therefore will continue to drop further in the coming months.
Some real-estate experts pointed out the state of saturation in the real estate market following a huge surge in the construction of investment buildings, stressing that the rents have to drop after long years of “rent bubbles”.
Director General of Awad Real Estate Company Hussein Mohammad Abu Abbas said the rents of residential apartments has started dropping in a noticeable manner, indicating that, “This phenomenon is expected to continue in the coming months because the number of empty apartments will increase so the rents will drop.”
Meanwhile, the Salafi National Bloc objected to the decision taken by the government to increase the fuel prices, insisting that it is not the right time for issuing such a decision. In a press statement, the bloc said it wonders why the government is ignoring the recommendations presented by the parliament’s Finance Committee when discussing the economic reform document to compensate citizens for the increased fuel prices.
It stressed that the state should first implement its decision on the rich segment of the Kuwaiti society as their wealth is increasing on a daily basis, insisting that Zakat should be collected from them as Zakat is the right of the society. The bloc indicated that there is no country in the world that does not impose taxes on the people who are rich or earn a high income, stressing that the citizens are enquiring why the state implements its decisions on them without paying any attention to the big companies and the great capitalists. It affirmed that it is expecting minister of finance to announce the increase in the rental values of state properties which are currently quite low.
The bloc lamented that the government bases its actions and decisions on some of the recommendations of the World Bank and International Monetary Fund especially the recommendation to limit the subsidies but it rejects the recommendations by the same bodies to impose taxes on the incomes and profits of companies. It called for the government to make expatriates bear the full costs of the services offered to them, and urged for more transparency in the decisions and steps taken to confront excessive expenditures.
SOURCE : ARABTIMES