KUWAIT: The value of real estate sales in Kuwait declined during the third quarter of 2023 to KD 800 million, the lowest levels recorded since the third quarter of 2020. This decline followed the government’s termination of contracts of 6,200 expatriates working in the government sector during the last fiscal year, as per recent official statistics issued by the Civil Service Commission.
The decrease in real estate values coincided with rising valuations in the residential sector, increased borrowing costs and growing market uncertainty. This uncertainty stems, in part, from questions about reforms to subsidies for water and electricity services and the distribution of land plots and housing units this year. Furthermore, residential property sales experienced a significant downturn, reaching KD 363 million, the lowest levels since the second quarter of 2020, primarily due to a reduction in the number of property transactions.
The expatriate population continues to face challenges that limit their spending and even force some to leave. Additionally, restrictions on granting visit visas to expatriates have contributed to a surge in vacant apartments, with their numbers exceeding 50,000 uninhabited rental investment apartments by the end of the first half of this year.
During the first half of this year, there was an unprecedented annual decline in the growth rates of the expatriate population. Growth dropped from 5 percent over the past five years to approximately 1.8% in the previous year. Expatriates typically reside in designated investment areas where they rent apartments, as Kuwaiti law prohibits them from owning property.