The initial price for any material, product, or commodity is the cost or factory price. Then costs and profits of the first and second sellers are added until it is offered in markets at two prices: wholesale and retail.
Ultimately, the final retail price must be suitable and acceptable to the target audience and market, proportionate to the value the commodity offers. It’s also important that prices drive the economy and life forward.
The principle in valuing and pricing state lands and properties is that they should be at the lowest level, similar to factory prices. Therefore, state prices are often “symbolic,” not reflecting actual accounting costs, always much lower than their counterparts in the open market. The state is an entity that does not aim for profitability and should not think with the mentality of an individual, merchant, or factory owner.
In recent years, it appears that the government has been valuing and pricing state properties at levels that closely approach or sometimes compete with retail and market selling prices of properties. They have raised rents for residential, investment, commercial, and industrial state-owned properties. This has also extended to auction property prices.
Rents for service branches in cooperative “mutual” societies built on free state lands in a closed market area with a limited shareholder audience have been raised to open market price levels. This is especially true for restaurant, bank, pharmacy, and garage branches.
The disparity between state and private prices is natural, and state prices remain the primary pricing basis for all. However, the pricing approach and dealing with public lands and properties have produced a rental obsession that has spread throughout the country, manifested in several aspects.
These results include inflated rents and selling prices in the open market, inflated property sale values, excessive tower construction, disappearance of suitable old buildings (some historical), increased vacancies, deterioration of the population structure to fill these vacancies, and smaller rental units.
The phenomenon of rented but empty properties has also increased, eviction of tenants followed by years of vacancy waiting for others, and unleased properties. Additions to buildings lacking basic services for current users, such as parking, have also appeared. As well as usage violations, pressure on services and infrastructure in the area surrounding the buildings, and more.
Government increases have raised production and trade costs and risks, consequently affecting their quality and diversity. This has directly led to an accelerated increase in inflation rates, with this month reaching “1.7% inflation rate in the Gulf, with Kuwait the highest at 2.4%” ( Al-Rai, November 2025 ). Lack of healthy diversity, difference, and creativity in commercial and industrial activities.
Investment risks for local and foreign investors have also increased, leading to economic instability due to capital risks. After real estate investment was once a safe haven, numerous empty projects have appeared throughout Kuwait, and they will increase.
All this is because the state has entered the arena to compete with retail property owners.
