KUWAIT CITY, Oct 23: As the local real estate market experiences a recent decline in residential property prices, experts are raising concerns over the reliability of analyses not rooted in scientific studies, reports Al-Seyassah daily. While many agree on the downturn, opinions vary significantly regarding the extent of the decline, with some predicting a staggering drop of up to 50 percent.

This uncertainty comes as hopes rise for a market recovery, fueled by recent interest rate reductions. Real estate analysts note the inverse relationship between interest rates and real estate demand -- when rates decrease, demand typically increases. These discussions follow statements from the US Federal Reserve, which indicated potential interest rate cuts five times through the end of the year. Experts like Abdulaziz Al-Dughaishem liken investment to a “purebred Arabian horse,” suggesting that once it rises, it’s challenging to catch up. Abdulrahman Al-Hussainan emphasizes the necessity of comprehensive studies to predict market movements accurately, while Ahmed Bou Abbas points out that multiple factors influence the market, with financing being the most critical, and geopolitical concerns having a limited impact. Saud Sahoud Al-Mutairi identifies taxation and restrictions on residential mortgages as significant contributors to the decline in property prices. Collectively, the experts assert that the local real estate market is subject to various influences, from macroeconomic factors to political dynamics and legislative changes. They criticize analyses not grounded in systematic research, labeling such statements as mere speculation and reflecting a “moody” rather than an “institutional” market. In light of these concerns, experts are calling for more rigorous, officially sanctioned studies to inform predictions about real estate market trends.

They urge government agencies to impose regulations similar to those of the Capital Markets Authority, which oversees the Kuwait Stock Exchange, to safeguard the economy from arbitrary statements and prevent manipulation of the real estate sector. Real estate expert Abdul Aziz Al-Dughaishem has affirmed that investment properties currently hold the strongest position in the sector due to sustained demand. He likened this dynamic to an “Arabian horse” that, once it rises, leaves competitors in the dust. Looking ahead, Al-Dughaishem predicts that investment real estate prices could increase by 15 to 20 percent in 2025. While he anticipates a decline in trading within the residential sector by 15 to 20 percent, and chalets by as much as 30 percent, he challenges more extreme forecasts of a 50 percent drop in residential real estate trading. Such a drastic decline, he argues, would equate to a collapse of the market, which he does not believe will happen.