By Majd Othman
KUWAIT: Foreign investments in Kuwait remain weak, despite the establishment of the Kuwait Direct Investment Promotion Authority, whose main role is to provide investors with the best environment and facilities. Preventing foreigners from buying properties is one of the main reasons for the dearth in local investment. Some real estate experts told Kuwait Times that Kuwait's policy and laws are the reason foreigners are not allowed to own real estate in the country, saying they don't see any logical reason for this ban.
"There is no reason to prevent expats from buying their own properties in Kuwait. According to government policies and from my point of view, the state can limit ownership of properties by expats or foreign investors to specific areas. They should allow it based to the government's desire to develop the economy," International real estate advisor Meshaal Al-Melhem told Kuwait Times.
"Kuwait has more than 3.5 million expats, who constantly transfer their money to their countries," Melhem said, adding "opening the door for expats' investment in properties will boost the rate of spending inside Kuwait, and will create new competitive opportunities that will also contribute to an increase in supply and demand, which will also benefit Kuwaiti investors."
According to the World Bank, total remittances by workers in Kuwait during the first nine months of 2021 amounted to KD 4.12 billion, a steady increase of 8.5 percent, with remittances during the same period in 2020 estimated at KD 3.8 billion.
Regarding real estate prices in Kuwait, Melhem explained that "if we compare the prices of properties according to the income of expats, they can be considered high, but Kuwait is a developed country that provides a safe environment and financial stability and does not impose any taxes, so real estate prices can be considered reasonable."
"If we compare Kuwait with the UAE and Britain and some other developed countries that are experiencing economic development and high demand for jobs, usually they have high property prices," he said. "Some amendments related to the real estate industry in Kuwait can be made to reduce the prices of real estate by offering a very large range of opportunities to create a balance in the value of properties and expats' incomes," Melhem added.
Secretary of the Real Estate Federation Qais Al-Ghanem recalled the Union of Real Estate in Kuwait had "demanded to allow expats to own apartments during the 1990s, especially since the Municipality and ministry of justice at that time also submitted similar proposals". "For no logical reason, we found the government was not interested in our proposal. We were aiming to find new investment tools in the Kuwaiti market to boost investment, which will benefit both Kuwaitis and expatriates," Ghanem said.
"It was not a priority for the government to pass the law, as well as its fear of a clash with members of the National Assembly, as Kuwaiti citizens reject such a law," he explained. "The real estate sector in Kuwait is ready and hungry for new buyers, especially with falling rentals of apartments as a result of large numbers of expats leaving the country and vacating their flats," Ghanem stressed.
Ghanem also spoke about the importance of banks' role in developing the real estate investment sector. He said real estate is one of the most important investment tools in Kuwait, pointing out that deposits in local banks have exceeded KD 30 billion.