Housing shortage poses dilemma for Kuwait

Kuwaitis say they may have to wait for up to 20 year on housing list amid lack of supply

(Photo for illustrative purposes only)

(Photo for illustrative purposes only)

Kuwait, one of the world's richest countries per capita, must make tackling a shortage of government-funded housing its top priority, officials in the Gulf Arab state said at the opening of parliament on Tuesday.

Accustomed to a welfare state which is generous by international comparisons, Kuwaitis say they may have to wait for up to 20 years on the housing list.

"The housing issue is the top priority in this session," parliament speaker Marzouq al-Ghanim said at the opening of the National Assembly on Tuesday. The cabinet needs to put forward improved solutions within a timetable, he said. "We have enough finances to solve this problem."

Providing more government-subsidised housing, however, would put further pressure on already stretched public finances, with government spending forecast to exceed oil revenues soon.

Kuwait's prime minister, Sheikh Jaber al-Mubarak al-Sabah, warned on Monday that the welfare system is unsustainable and said the major oil producer must slow consumption of its natural resources.

As part of an extensive national welfare programme, Kuwaiti men can apply for government housing after marriage, receiving loans that are paid off slowly.

But the waiting list for government-subsidised housing grew to more than 100,000 in 2013 and is expected to grow by thousands each year in a country where more than half of the 1.2 million nationals are under 25.

Despite its oil wealth, Kuwait has suffered from a lack of infrastructure development due to political infighting, entrenched bureaucracy and bad planning, analysts say, making it lag regional peers like the United Arab Emirates and Qatar.

Kuwaiti citizens might have disposable income but are lacking in basic necessities, they say.

"You can buy a Bentley but you cannot buy a house," joked Eid al-Shihri, an organiser of a campaign called "Waiting for a House" which was set up by a group of young Kuwaitis to press the government to build more homes.

The group, which has increased its activities in recent months, has around 12,000 followers on its Twitter account @na6er_bait. A recent government poll found that housing was the most pressing topic for voters.

As well as the prime minister, a number of other officials have voiced concern that Kuwait is spending money too fast.

Like other wealthy Gulf Arab countries, Kuwait does not tax earnings. Spending programmes are often seen as having largely shielded the region from Arab Spring-style unrest.

"I think the announcement is not at the right time," MP Adel al-Kharafi said, referring to the premier's remarks which appeared in local media on Monday.

"Even if the idea is accepted, even with that support, people are still weak," he said, citing a lack of public sector jobs, poor health services and education, alongside housing.

Less than 8 percent of Kuwait's land has been developed, according to an Oxford Business Group report published in April which said it was hard for investors to enter the market. Campaigners say powerful individuals hoard land to push up prices and rents to their benefit.

Housing is also a major issue in large neighbour Saudi Arabia where King Abdullah announced after Arab uprisings broke out in North Africa in early 2011 that the government would build half a million new homes at a cost of KD250bn ($67 billion).

The world's top oil exporter has also made it easier for people to take out low-interest loans to buy houses and has passed a mortgage law that may ease access to private-sector home loans.

Kuwaitis say they want this kind of support too.

Former boxer Ahmed al-Ezmi said he had been waiting 17 years for a house. His nine-member family, which includes his son's family, are crammed into a three-bedroom rented apartment costing KD300 ($1,100) a month, he said.

His son is also on the waiting list, he said at a weekly "Waiting for a House" meeting outside the government housing authority late on Monday.

It is the middle class which is suffering, said 30-year-old entrepreneur Bashar al-Ostad, who runs a hotel booking website.

"I consider myself one of the fortunate Kuwaitis and still I cannot afford to buy a house," he said at the meeting, where around 30 men sat on carpets and sipped coffee.

The prime minister's comments about the welfare system "outraged public opinion," Ostad said. "We can travel, we have disposable income but the basics are not there."

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Posted by: Ahmed

It?s apparent that a country like Kuwait that has not diversified their economy, can no longer run a ?gravy train? because it is about to run off the track. And for the fortunate man in this article that sits on the carpet with 20 men sipping coffee, you are part of the problem. Kuwaitis who as his 7-10 children reach 18 have arranged marriages, so they can get on the list for government housing that overwhelms the system. These housing laws were drafted a long time ago when the population numbers were less and the government was stable enough to comply with these laws. The Kuwait government can no longer comply with the promise that all Kuwaitis are guaranteed a job in the public sector and housing. Offering special loans, regulating the real estate market, and building affordable housing to sell to nationals might be an option. But the lack of foresight in this government is what is so alarming, you didn?t foresee this 10-20 years ago?

Posted by: John

There is also another issue in Kuwait where newly married couples, who prefer not to live in their parents? home like in previous years, are being turned away by Kuwaiti landlords for various reasons. So this government should provide incentives for Kuwaiti landlords to rent apartments to young couples in Kuwaiti-only buildings. Kuwaitis need to take a strong look at the problems they have caused for themselves. No one really will feel sorry for them as they have foolishly spent the country's purse overseas. As one commentor 'truthhurts' is that the average Kuwaiti is struggling in a burgeoning middle-class that feel abondoned by its government's policies.

Posted by: Billy

What a mess Kuwait is in. Expats, who do all the work are being deported in their thousands for minor traffic offences and the government objective to deport huge numbers of these workers over the next few years will only make the situation worse. Throw into the pot some new scheme such as "medical tests" for expat homosexuality and you have a country that must be very low on anyone's wish list as a place to live. So what will be left? Kuwaitis used to a cradle to grave welfare system, extravagant government handouts for housing, lucrative non-productive public sector jobs and a local population doing a fantastic imitation of baby birds in a nest - totally inactive sitting there with their mouths open waiting for the mother to offer an easy meal. Kuwait has no alternative income to oil revenues and they are spending those faster than they are earning them. Bye bye Kuwait....was not even nice knowing you!

Posted by: truthhurts

I don't know when the last time government houses were built, these days companies take over prime land and build ridiculous houses charging a fortune for them. Why doesn't the government start building the old style houses? Why does everyone in Kuwait think they need a 20 bedroom mansion? Why do the rich build several huge mansions and never live in them? Greed! Everyone should be allocated the same size lot instead of greedy rich people hoarding 2-3 lots for their mega mansions that they rarely visit. Rich people who run the place don't care about normal citizens problems as long as they are living the high life. There is a huge social gap, you're either rich or survive every day. Don't let the infamous "cradle to grave" quote fool you, there are some citizens who barely make it not to mention the loans they take to make ends meet. Bring some "normal citizens" into Parliament and let them have some say over the country. Rich get richer, country suffers from their greed.

Posted by: bemused

If you have disposable income to buy a Bentley, travel, etc, then you have the income to buy a house without government welfare. You are not a helpless ragamuffin. Reach into your own pocket and do something for yourself rather than wait for a handout, for heaven's sake.

Posted by: jay

well said not to mention the interest free loans etc they get
poverty is relavent and most of thier servents drivers housemaids etc paid a pittance are poor
a give it to me now has created a dont want to work for it attitude

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