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Realty plots’ prices to decline in long run: Union

local4KUWAIT: Tawfiq Al Jarrah, the chairman of the Kuwait Real Estate Union, indicated yesterday that housing allotments by the Public Authority for Housing Welfare (PAHW) will lead to significant decline of realty plots’ prices in the long run.
Jarrah, interviewed by KUNA, said the PAHW’s recent residential units’ distribution to citizens in Al-Mutlaa, north of Kuwait City, did not “contribute to pushing the prices down in the short run.” However, the allotments will result in substantial decline in the long term, with minor increase in the short and medium terms, he added, noting that private housing occupation reached 98 percent, according to a study conducted by the union covering the current year. “This is a clear indication about the investors’ shifting toward the residential property.”

He attributed rising realty prices to high demand on residential units and slow pace of land plots’ distribution. Some investors have started building housing units for investment, due to decline of banking interests.
The businessmen are currently favoring housing plots for investment ones, due to high feasibility namely profits amounting to more than nine percent, Jarrah said, also noting in this respect that some of the private residences have been transformed for investment purposes, namely leasing. Housing and investment realty grew by 11 percent over the past seven years, he said, also indicating that a large number of stock traders have moved to real-estate businesses.
Jarrah also linked the high prices to limited houses’ allocations by the state, estimated 3,000 units per year, in addition to population growth and land shortage. The state authority is planning to distribute up to 12,000 units, including real-estate plots, houses and apartments flats, for the 2014-2015 period. – KUNA

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