Salary cuts and job losses hit real estate market in Kuwait
KUWAIT CITY, Jun 7: Real estate sources are expecting the prices of investment housing properties to decrease by 20% to 35%, and a possible drop in occupancy rates to about 50% in some areas due to the inevitable emigration of a large number of expats and the reduction of salaries.
The sources pointed out that many expats will lose their jobs as a result of activities stopped by their companies due to the corona pandemic or the loss of their jobs and a large portion of them will leave the country which will increase the supply of apartments and change the equation of rental prices.
The sources stated that the law on reducing salaries will push the tenants to search for apartments at lower prices which increases the supply of large apartments with high rent. The landlords will have to reduce rents to maintain the tenants in addition to that some companies have already begun to offer to tenants free one to two months stay in order to fill the vacant apartments.
The sources pointed out that salary cuts will hit the real estate sector first, specifically renting of apartments, the operation of which depends on the expats expected that real estate companies will also be affected, especially as real estate company need an anticipation period after the crisis, so that the picture becomes clearer in terms of price and returns indicators. Turnout.
Real estate sources expected that the properties of the isolated areas will witness a noticeable decline in occupancy rates. The sources attributed their expectations to several reasons, most notably that these regions contain large numbers of marginal or bulk workers, which will be forced to leave the country during the coming period, while tightening procedures on them, as well as fighting residency dealers and transferring their files to the prosecution, and therefore you will find large numbers of Employment The only option is to emigrate to Kuwait and return to the motherland.