The real estate industry is facing a financial crisis due to the low number of expatriate workers in Kuwait, which is likely to significantly reduce house prices and rents.
The number of foreign workers returning home after being unemployed due to Corona has reached six and a half lakh, while the government has decided to reduce the number of migrants by another thirty percent.
After the repatriation of foreign workers, many rented buildings are lying vacant, causing problems for the owners and the real estate industry has stagnated.
The owners agreed to rent out the vacant buildings at low prices and at the same time announced to sell their houses at low prices, but to no avail because there were no buyers or tenants.
After the return of foreign workers in Kuwait, more than 80,000 flats became vacant, which had a direct impact on the real estate sector.
According to the data of the Ministry of Interior, around six and a half lakh workers have returned to their countries, while the government announced to reduce the number of foreign migrants by another thirty percent, which will make a huge difference to the real estate sector.
Amar Haider, vice-president of the Real Estate Brokers Union, says that ‘sending in more foreigners will free up thousands of apartments, lower prices and lower rents’. He said that only the reform decisions expected next year can change the situation.
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2024-09-09 22:27:34
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The Real Estate Industry in Kuwait Faces Financial Crisis Amidst Low Number of Expatriate Workers
The real estate industry in Kuwait is grappling with a significant financial crisis due to the dwindling number of expatriate workers in the country. This decline has led to a surplus of vacant properties, resulting in a downward pressure on house prices and rents.
The Impact of Foreign Worker Repatriation
The COVID-19 pandemic has had a profound impact on the global economy, and Kuwait is no exception. The repatriation of foreign workers, who were rendered jobless due to the pandemic, has reached a staggering 650,000 [[3]]. Moreover, the government has decided to reduce the number of migrants by an additional 30%, further exacerbating the situation. As a result, many rented buildings are lying vacant, causing problems for property owners and stagnating the real estate industry [[2]].
Consequences on the Real Estate Sector
The sudden influx of vacant properties has created a supply glut in the market, leading to a decline in property values and rents. Property owners, in a bid to mitigate their losses, have resorted to renting out vacant buildings at lower prices and selling their houses at discounted rates. However, these efforts have been in vain, as there are no buyers or tenants willing to take up the slack [[3]].
Statistics and Projections
According to the Ministry of Interior, more than 80,000 flats have become vacant following the return of foreign workers in Kuwait. This has had a direct impact on the real estate sector, which is struggling to recover from the economic downturn [[3]]. In fact, a recent report by Marmore Mena suggests that the value of transactions in the real estate sector declined in 2023, despite prices and rents holding steady [[1]].
Outlook for 2024
While the current situation appears bleak, there are signs of a potential rebound in the real estate sector in 2024. According to a recent economic report from the National Bank of Kuwait, the sector may experience a slight rebound in 2024 [[3]]. This prediction is based on the assumption that the economy will recover gradually, and the government will introduce measures to stimulate growth and investment in the real estate sector.
Conclusion
The real estate industry in Kuwait is facing a financial crisis due to the low number of expatriate workers in the country. The repatriation of foreign workers has led to a surplus of vacant properties, resulting in a decline in property values and rents. While the current situation is challenging, there are signs of a potential rebound in the sector in 2024. To mitigate the crisis, the government and stakeholders must work together to stimulate growth and investment in the real estate sector.
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The Real Estate Industry in Kuwait Faces Financial Crisis Amidst Low Number of Expatriate Workers
The real estate industry in Kuwait is grappling with a significant financial crisis due to the dwindling number of expatriate workers in the country. This decline has led to a surplus of vacant properties, resulting in a downward pressure on house prices and rents.
The Impact of Foreign Worker Repatriation
The COVID-19 pandemic has had a profound impact on the global economy, and Kuwait is no exception. The repatriation of foreign workers, who were rendered jobless due to the pandemic, has reached a staggering 650,000 [[3]]. Moreover, the government has decided to reduce the number of migrants by an additional 30%, further exacerbating the situation. As a result, many rented buildings are lying vacant, causing problems for property owners and stagnating the real estate industry [[2]].
Consequences on the Real Estate Sector
The sudden influx of vacant properties has created a supply glut in the market, leading to a decline in property values and rents. Property owners, in a bid to mitigate their losses, have resorted to renting out vacant buildings at lower prices and selling their houses at discounted rates. However, these efforts have been in vain, as there are no buyers or tenants willing to take up the slack [[3]].
Statistics and Projections
According to the Ministry of Interior, more than 80,000 flats have become vacant following the return of foreign workers in Kuwait. This has had a direct impact on the real estate sector, which is struggling to recover from the economic downturn [[3]]. In fact, a recent report by Marmore Mena suggests that the value of transactions in the real estate sector declined in 2023, despite prices and rents holding steady [[1]].
Outlook for 2024
While the
