KUWAIT CITY, Oct 2: Real-estate experts have warned about the upcoming huge crisis of increased rents due to acute shortage of investment apartments and buildings to meet the anticipated increase of foreigners in the country because of huge government projects that will require more than 100,000 workers, reports Al-Rai daily.
The Treasurer of Real- Estate Owners Union Qais Al-Ghanim said, “The numbers indicate a growing vacuum between the increasing demand and supply in terms of the government’s oil projects which will require recruiting thousands of workers from overseas”.
According to the estimates of some experts, Kuwait is in need of more than 100,000 new apartments in the next five years to manage the national population growth and extra manpower, which means about 3,000-5,000 new commercial buildings are required.
Such an increase will put heavy pressure on the current buildings which are already full. It will result in huge inflation in the cost of living, followed by increase in work cost and fallback of competitiveness in the country. According to the Real- Estate Owners Union, there are about 11,700 residential buildings which are currently available.
Meanwhile, Chairman of the union Taufiq Al-Jarrah said, “The problem will aggravate to become a real crisis in the next two years especially since destruction and rebuilding of old investment buildings will reduce the supply for a short while, which however could result in increase of the rents”.
The latest statistics from the union indicate that the average monthly rent of residential apartments of two to three years old has increased by 11.8 percent, which is KD 267 in the last quarter of 2011 to more than KD 300 at the end of last year.
About 24 percent of the apartments in the market consist of a bedroom and a sitting room while about 55 percent of apartments are two-bedroom apartments with a sitting room.
Source arabtimesonline.com