(MENAFN– Kuwait News Agency (KUNA)) By Suleiman Redha
KUWAIT, July 26 (KUNA) — The Kuwait housing real-estate scene had witnessed a sharp decline in deals by 50 percent in the first half of 2022 compared to the same period in 2021.
Some attributed this decline to price inflation of real estate and the static purchasing power on part of clients in Kuwait leading to a huge margin between supply and demand.
There were 2,470 deals worth KD 1.13 billion (around USD 3.3 billion) in the first half of this year as opposed to 4,814 deals worth KD 1.40 billion (around USD 4.6 billion) in the same period in 2021.
Speaking to KUNA on this issue, local real-estate expert and Director General of Abraj Behbehani company, Alaa Behbehani told KUNA Tuesday that the price inflation was the main cause of the sharp decline.
Kuwait, as in the case of other countries, has been affected by the increase of interest rate announced by the US Federal Reserve, said Behbehani, adding that the latter continued to increase the interest rate of the US Dollar, which contributed in turn to withdrawal of liquidity from the world market.
The effects of the Federal Reserve’s decision might not be felt now within the national market but within a year from now, Behbehani elaborated.
He continued to say that Kuwait was not immune to happenings in the world economy, saying that bank deposits had become more attractive to major investors who were looking for security rather than invest in real estate.
Behbehani warned that the economic tremors, which jolted major world economies in the US, Europe, China, Japan, the UK, and elsewhere, were pointing towards a sort of economic depression due to the huge connectivity amongst major markets.
What’s happening on a global scale has its impact on local affairs, affirmed Behbehani, indicating that investments worth KD 380 million were taken out from real-estate in Kuwait and invested somewhere else in early 2022, which pointed to a lack of interest in investing within the sector.
The expert predicted that the second half of the year would continue with the same trend with lack of housing real estate deals, while commercial real estate might see a bit of activity post-COVID 19 restrictions.
While Housing real estate might not been scoring high numbers within the first half of this year, other real-estate sectors such as commercial and investment had been booming.
Investment real estate saw 674 deals worth KD 579 million (around USD 1.9 billion) in the first half of 2022 as opposed to 587 deals worth KD 268 million (around USD 884 million) the same period last year.
Commercial real estate also saw a jump by 111 deals worth USD 390 million (around USD 1.2 billion) in contrast with KD 59 million (around USD 195 million) in the first half of 2021. (end)
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