Kuwait needs to embark on structural reforms that include greater involvement of private developers to address its latent housing crisis, according to a local report.
Investment firm Kuwait Financial Center (Markaz) said in its research report that demand for homes in Kuwait has far exceeded supply, leading to a worsening housing crisis over the past few years and requiring urgent action. of the government.
In his report, Markaz said that despite government facilities for citizens, including land and interest-free loans of up to 70,000 Kuwaiti dinars ($230,000), housing demand remained well ahead of the offers for several reasons.
The main obstacles to increasing housing supply include the low contribution from the private sector due to government restrictions and the difficulty in obtaining sufficient housing loans, according to the report.
Other issues include low land allocation in urban areas, high capital needed for infrastructure development in construction sites and the fact that the government owns at least 90% of the land needed for housing projects, adds the report.
“Unless action is taken, the crisis in the housing sector is expected to worsen due to rapid domestic demand for housing, given that almost 75% of Kuwait’s population is young (under 39 years old) and that the population trend is steadily increasing. to form families,” Markaz said in his report. “In order to tackle this problem, there is an urgent need for structural reforms and a series of rapid initiatives in this sector.
The report proposed to offer more land by the government to citizens and private developers, to expand the land allocated for houses, and to enact laws on land ownership by the private sector.
“There is also an urgent need to help citizens obtain low-cost housing loans, to encourage banks to facilitate these loans and to induce the private sector to strengthen its role in the housing sector.”
(Writing by Nadim Kawach; Editing by Anoop Menon)