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Housing shortage poses dilemma for Kuwait

Kuwait, October 30, 2013

Kuwait, one of the world's richest countries per capita, must make tackling a shortage of government-funded housing its top priority, senior government officials 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 UAE 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 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 per cent 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 SR250 billion ($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 added.-Reuters




Tags: Kuwait | Crisis |

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