Rocketing rent prices in Kuwait choking expats
More and more people are complaining of the increase in house rents this year. The rents have gone higher in a very short three-year time period. Some people, especially the expats, are not able to live a comfortable life with this ridiculous increase which eats into a large chunk of their salary.
Don, an expat father of two kids feels frustrated with the increasing rents. “I was sharing a three-bedroom apartment with another family, and the landlord demanded an increase of KD 45, so I decided to move into a two-bedroom apartment to pay KD 275. I still consider this rent very reasonable compared to what’s available in the market now. This was three years ago, and now I’m afraid that they will increase the rent again shortly.
All the prices are increasing, especially the rent, while my salary has not gone up for a long time,” he told the Kuwait Times. Economic analyst Hajaj Bu Khadour considered the high and rapid increase of rent as a negative phenomenon affecting the economy badly. “The rents have increased about 27 percent during the last three years, while the normal growth rate is about 8 percent. I blame the government in the first place for the wrong decisions they have taken and the parliament as well for their legislation, which is encouraging inflation, and not providing stability or supporting the economy.
So this increase is a result of these decisions taken over the past few years,” he pointed out. “There should be a proper economic view to manage the country. Wrong laws damage the economy. It affects inflation in general, and also includes the prices of property, food, and so on.
This huge increase may also cause imbalance and social problems in the country. For instance, increasing the housing loan to KD 100,000 will satisfy the citizens but on the other hand, the prices of properties have also increased. Early retirement also affects this issue. There should be laws set to regulate and limit this rise,” added Bu Khadour.
Ali, who works with a real estate company in Ahmadi, admitted the rapid increase in rents can be attributed to competition. “Everything is increasing, and rent is part of the necessary things that are subject to increase. We have competition from other companies, so our prices should be similar. Any increase in rent depends on the location and the age of the building, so the landlord doesn’t set certain percentage for increase,” he said.
The demand and supply always regulates the price and there is a high demand. “We deal with buildings in Mahboula. Most of the buildings that we are managing are rented for big companies, especially the oil companies, and they rent the whole building for their employees, and then accommodate six or more employees in one apartment. They change the apartment’s design and omit the living room.
The owner increased some apartments to about 18 percent, so the two-room flats in old buildings now cost KD 210, while other new flats that are smaller cost about 280. The companies create this problem and if they stopped doing it, the prices will definitely drop, said Ali. Salah, who owns two houses also blamed the government for this problem. “The government is the main reason for the rent increase and not the landlord. I should go with the market, and since my neighbors increased the rent, I have to increase it as well. The rent was KD 300 and I increased it recently to KD 600 to be on par with as the neighbors.
I think this is logical, as the high price of land is the main reason. So if somebody bought the land for KD 500,000 and set up the building for KD 100,000, he can’t rent the apartment for KD 150. He should get the money that he spent back,” he explained. According to him there are solutions to this problem. “We have a housing problem in Kuwait.
There are 100,000 people waiting for their turn to receive the governmental house. All these Kuwaitis are living in rented houses, so the demand is high and supply is low. As long as there are tenants who have no option but to rent, the landlord will keep increasing the price,” he said. “The government is only using about 5 percent of Kuwait’s land for housing while the rest is a desert. If they allowed more property to be released for people to build houses on, or if they built more houses in new areas, then the supply will increase and the prices of land will drop, which as a result will decrease the price of rents, as the pressure will be relieved from the rented apartments.
The government has a monopoly on parts of Khaitan, which they bought from the residents and nobody can benefit from these properties. This is in favor of the big businessmen who are trading with South Surra’s lands, and the price of lands is always high and is even increasing. In the United States, I could buy a house for KD 30,000 while in Kuwait I can only buy a livestock farm for KD 50,000,” concluded Salah.
By: Nawara Fattahova
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