Since the issuance of Law No. 74 of 1979 regarding the regulation of non-Kuwaitis’ ownership of real estate, it has been amended three times, the last being two days ago. Foreigners (resident Arabs) own about 19 properties according to available sources.
The most prominent aspect of the recent amendment pushes the Arab owner, husband of a Kuwaiti woman, to transfer property ownership to her, then to her son as inheritance from her. The text also specifically identified “real estate funds and licensed investment portfolios in Kuwait… investment entities…” as commercial entities with the right to own residential property.
Apart from the first amendment, which is the most prominent, will detailing the type of non-Kuwaiti companies affect or increase the number of foreign companies owning property?
There are two aspects to this question.
The First Aspect
There is a local real estate habit that closely resembles the habit of antique and taxi sellers in some tourist countries. One price for citizens and a price 10 times higher for tourists. Our real estate prices are already 10 times higher for citizens 🙂
For private housing, prices in Kuwait have gone beyond expensive to the point of absurdity for the average citizen. Therefore, it would be cheaper, easier, and smarter for foreign companies – whose business is money and investment – to rent accommodation for their employees rather than accepting an exaggerated price above the local price. Unless they are willing to part with their money.
When foreign companies see high selling prices against low value and services in real estate, legislative and logistical difficulties, with the possibility of canceling commercial contracts, and the potential cancellation of residency permits for their wives and families without prior notice, they will likely resort to renting, perhaps in a hotel, while reducing the number of their employees inside Kuwait.
The Second Aspect
Since private housing is expensive, companies might buy investment residential property.
The real estate investment rule states: if you don’t sell or rent 75% of the property before opening day, you’ve entered into a loss that increases daily from the opening hour.
There are heavy properties that have remained vacant for a long time, years after their completion. We believe the main reason is their exaggerated prices against low value. These properties have not received the required demand, whether for ownership or rent, and some are offered for sale in their entirety.
The investment real estate sector is oversaturated, and those who have the ability to buy locally are very limited, decreasing every month. The goods are stagnating with no buyers. On the other hand, owners are “holding onto their land,” sticking to their very high prices (an authentic Kuwaiti habit).
Therefore, efforts are made to attract capital from abroad, in hopes of saving owners from their predicament, as they are not saving themselves.
We believe the slight amendment neither helps nor harms. People of money and investment abroad also have minds and eyes.
And God knows best,,,
Al-Jarida Newspaper: Decree on regulations for non-Kuwaitis’ ownership of real estate
https://www.aljarida.com/article/111629
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