Dubai: The recent hike in prices of residential real estate properties in high-end areas of Kuwait has raised many questions, especially since some of the deals in these areas recorded a price jump of almost 40 per cent while most of them ranged between 10 and 15 per cent, Al Rai daily reported.
Such a hike in prices comes at a time when all economic sectors are experiencing a recession under pressure from weak liquidity, which has caused a tangible weakness in the movement of real estate transactions and acceptable hikes in some areas.
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According to the paper, the rate of this hike has exceeded the rate in the same areas prior to the COVID-19 crisis.
Real estate sources said they monitored an unprecedented increase in the prices of private housing properties in high-end areas during the last period, especially in Shuwaikh, Abdullah Al-Salem and Nuzha suburb.
They explained, “The unjustified rise in real-estate prices in high-end areas raises wide question marks, and speculations about the possibility of the purchase of real estate and expensive plots being a window through which suspicious financial transactions pass through.
One example of such price hike that raises suspicion is the sale of a complex in Safat Square for nearly KD 22 million, which was later resold for more than KD 46 million at the end of the last quarter of 2019.
This means the account recorded a price hike of more than 100 per cent during the year. The money launderers’ behaviour allows them to accept entry at a high price and then exit even at a loss. Some real estate properties in these areas will witness an additional hike of approximately 20 per cent in the coming period.”
Deputy Chairperson of the Real Estate Brokers Union and a member of the Dispute Settlement Committee at Ministry of Commerce and Industry Emad Haidar revealed that, “The committee recently discovered suspicions of money laundering with a number of brokers after their books were checked.”
He said the committee recently transferred a real-estate broker to the Anti-Money Laundering and Terrorism Financing Department after discovering he had removed a number of contracts from the broker’s book and refused to disclose the nature of the transactions in those contracts. Haidar added, “It was noticed during the last period that some brokers rented their books or sold contracts from them.”
