KUWAIT CITY, Feb 6: Recent trends in the Kuwaiti real estate market have highlighted a growing preference for purchasing built properties over land, reflecting a significant shift in market behavior. The real estate experts have observed that demand for ready-made buildings has surged, particularly in residential sectors, marking a notable change in consumer preferences and investment strategies. The factors driving this trend include rising construction costs, a desire to avoid the complexities of building and concerns over real estate fraud. Experts point out that the preference for built properties is growing in response to several challenges facing the market.

Alaa Behbehani, a real estate expert, emphasized the need for the Kuwaiti real estate sector to align with global standards in urban planning and residential development. He highlighted that the demand for built properties stems from their convenience and reliability, as these properties save buyers from the high costs and risks associated with construction. With new real estate laws in effect, the credit and banking sectors are increasingly favoring properties already built on vacant land, contributing to the rise in demand for these properties. Fahd Al-Momen, another expert in the field, noted that during market recessions, there is a marked increase in transactions involving built properties due to the comparable prices between vacant land and houses in certain areas.

He pointed out that the price difference between land and ready-to-move-in homes can range from 70,000 to 100,000 Kuwaiti dinars. As a result, many buyers are opting for homes rather than investing in land and construction, especially with the escalating costs of building materials and labor. Al-Momen further explained that new housing developments, such as those in newly established cities, have also influenced this shift. Citizens who had been allocated land in these areas have started selling their properties, making them more available for buyers looking for immediate homes. Properties, such as villas and buildings priced between 250,000 to 350,000 dinars, have become increasingly attractive to buyers, particularly those not involved in speculative trading.

The rising preference for built properties can be attributed to several key factors:

- Direct support from the Credit Bank for the purchase of homes, offering financial aid of up to 70,000 dinars

- New regulations for construction in areas like Al-Mutla’a, West and South Abdullah Mubarak and others that require properties to be built within a specific time frame

- Limitations on financing for private housing, with eligibility for only one house per citizen

- Decrease in demand for land in certain areas such as Sabah Al-Ahmad Sea City, as most of the land has already been sold off following the end of the COVID-19 pandemic

- The scarcity of land and a lack of attractive new areas for investment While the shift towards purchasing built properties may seem driven by market constraints, it also highlights the changing dynamics of the real estate sector in Kuwait.

With regulatory reforms, rising construction costs and evolving market preferences, this trend is expected to continue as buyers seek immediate solutions to housing needs. Real estate professionals believe that adapting to these new realities will be key to maintaining growth and stability in Kuwait’s residential real estate market in the coming years.

By Marwa Al-Bahrawi
Al-Seyassah/Arab Times Staff