For the third month in a row, Tariq fails to pay the rent for the apartment that he lives in the Salwa area, located in Hawalli Governorate, east of Kuwait.

The Lebanese expatriate who has been working as a waiter in one of the famous oriental restaurants for more than 7 years is trying to fulfill his increasing obligations, but he does not succeed in reaching his desired goal, in light of the deduction of half his salary for more than 5 months.

Tariq tells Al-Jazeera Net that the burdens and debts began to accumulate on him month after month due to the closure decisions and the negative economic repercussions associated with the crisis caused by the spread of the Corona virus, especially since last April.

The young man in his thirties, who returned to his usual work about a month ago after easing the lockdown procedures, added, "Before the start of the Corona crisis, I used to get 550 Kuwaiti dinars" about 1750 dollars "from which I pay the apartment rent, the phone bill, the car installment and other simple living requirements, Today, I only get half of this amount, so I can no longer manage my affairs as I used to do in the past. "

The Lebanese expatriate - like other fellow employees - has high hopes for the promises of the restaurant owner to restore their salaries to their previous status within two to three months at the latest, with the expected improvement in movement and income during the coming days and weeks.

The majority of tenants who vacated apartments permanently left Kuwait after they found themselves without a job (Al-Jazeera)

Real estate crisis

The crisis that Tariq and tens of thousands of other tenants are going through is casting a heavy shadow over the owners and owners of real estate and residential investment apartments in Kuwait. They are well aware of the material suffering that the vast majority of expatriates are going through, whose jobs and interests have been damaged and their salaries diminished, but this does not spare them the torrent Electricity and water bills and bank loans that banks are preparing to deduct them again after a 6-month hiatus.

In this context, the expert, real estate analyst, Chairman of the Board of Directors of the Al-Manakh National Company for Real Estate Estimates, Abdulaziz Al-Dughaishem says - in a statement to Al-Jazeera Net - that "the real estate sector in Kuwait is still coherent until now despite the slight tremor it has witnessed as a result of the current economic difficulties and challenges, but it is not even The sector is deteriorating. Landlords, tenants, and even banks should cooperate to pass this difficult period with the least possible damage to everyone. "

While Al-Dughaishem confirmed that there are many building owners who have already reduced rents by nearly half over the past period, feeling the difficulty of their tenants' conditions, he called on landlords who did not take similar steps to hasten to offer discounts to their tenants so that the crisis of the two parties would not worsen later.

The real estate expert pointed out that the majority of real estate owners have obligations and financial burdens that are not at all simple, such as electricity and water bills in addition to bank loans, explaining at the same time that the current crisis is not only local, but rather a global crisis that affected various countries of the world and all sectors and economic fields.

Urgent proposals

Based on these data, a specialized study published by the Kuwaiti newspaper Al-Qabas more than two months ago indicated that the value of the real estate sector in the local market exceeded 25 billion dinars (about $ 80 billion), as this sector is financed by banks with a value of 8.9 billion dinars, about 28 billion Dollars, "according to the report of the Central Bank of Kuwait.

The same study pointed out that the total income of the real estate sector constitutes more than 1.7 billion dinars ($ 5.4 billion), with an average return of 7%, and income for banks of 312 million dinars ($ 998.4 million), with an average return of 5%.

The study called for a series of urgent steps to be taken in order to save the real estate sector, including the cooperation of banks and support by the Central Bank to reduce interest on all real estate contracts for a longer period, and to put in place a clear and explicit law on the Corona crisis that regulates the relationship of the tenant with the lessor for each sector on the amount of damage incurred by him in the event of failure The agreement of the lessee and the lessor to pay the rent.

The recommendations also included reducing electricity and water fees for a period of not less than a year, as well as extending the period of delaying mortgage loan payments for an additional 6 months, due to the long period of the crisis and so that all parties can provide the necessary liquidity to pay off the many obligations they owe.

The study also called for the suspension of building permits for a period of not less than a year for the investment and commercial sectors and the freezing of new investment and commercial areas, with the aim of preserving the supply in light of an expected decrease in demand during the coming period and so that the real estate values ​​of the establishments within the country are not affected by what will be reflected in the banking sector directly. And the establishment of a real estate fund with a minimum value of two billion dinars ($ 6.4 billion), and 50% of the state invested in it. It will be managed jointly by representatives of the state and real estate owners, provided that it is traded on the Kuwaiti stock exchange.

The number of vacant apartments in Kuwait is about 49,000 (Al-Jazeera)

Increase vacancies

For his part, Hisham Abu Al-Azm, who works as a real estate agent for more than one building in the Salmiya area, is complaining about the increase in vacancies and the decline in occupancy, saying that more than 10 tenants evacuated the apartments they used to live in during the past two months due to the acute financial crisis.

Abu Al-Azm explained to Al-Jazeera Net that the majority of tenants who evacuated apartments permanently left Kuwait after they found themselves without work due to the new reality imposed by the Corona pandemic, indicating that the decline in income and the difficulty of the current situation prevented finding new tenants at the same previous value.

The rental value of the small apartment consisting of two rooms and a hall in areas such as Salmiya, Salwa, and Hawalli Square close to corporate headquarters and business centers in the vicinity of the capital ranges between 280 and 360 dinars (890 and 1150 dollars respectively. "

Last July, an official statistic published by the daily Al-Rai newspaper revealed that about 160,000 expatriates have left Kuwait since mid-March, while the number of departing arrivals is expected to rise to about one and a half million by the end of this year, according to the statistic. Itself.

A specialized report issued by the Kuwaiti Real Estate Union concerned with monitoring market conditions revealed earlier that the number of vacant apartments in the country is about 49 thousand, indicating at the same time that there are more than 26 thousand other apartments under construction, and therefore the local market needs to absorb About 75 thousand housing units for investment during a period ranging between 4 and 5 years only.