Prices for land were astronomical, and the average Kuwaiti just HAD to live in a house for plenty of reasons, most of them cultural. Demand is there, but I won’t say it’s reasonable. We just loves us some houses.

I’m 27 myself, and my days are spent worrying about post-marriage. Main worry isn’t the wife, it’s where I’m going to live, and how many centuries will I bleed for the banks.

I wouldn’t overestimate the average Kuwaiti. There’s quite a lot of us struggling.

FIRST - It is never a good idea to get a loan, unless your in an extremely dire situation and even then not any type of loan (yes, there are many types). I know some that have taken loans for some of the worst reasons, including a vacation (which they could not afford) or just because they could get it without considering the repercussions. Again, not all loans are the same. Car loans are different from personal loans which are different from balloon payments and fixed or floating rate loans. There are so many different types you could mix and match to short,mid and long-term needs.

SECOND - You cannot take out more than KD70,000 as per new CBK regulations.

THIRD - Prior to the new regulations I could purchase my real estate at the prices I thought were reasonable for my needs. As for bad debt, its the banks decision to give you the loan thus there liability when you default. Don’t forget prices in the 80’s were twice what they are today!

FOURTH - Everyone is forgetting that Kuwait (as we know it) is only occupying around 8% of the total land [which means the government owns more than 90%]. The government could easily allocate free land to every individual (similar to Dubai 15 years ago) just to expand the country.

Finally, I am not stating that its a good idea to purchase the land, or get the loan, I am mainly pressing the point that the government gave more importance to the KD120 salary increase than they did to the issue of residential real estate. I read more stories and official reports (ie. the World Bank recommendation) than to this issue. This new action is not going to allow you to purchase your home anyway, the price is still to high. If the prices do fall even more the economy will be affected adversely, even to the point that housing will not be the biggest concern anymore.

It is very sad that workers in those businesses were wiped out overnight by a parliamentary decision that took little or no study, let alone prior notice that affected every single individual. DONT FORGET that even the house you live in lost value by a political decision NOT ECONOMIC CONDITIONS!

I dont even want to consider the consequences of this parliamentary decision on the confidence of foreign investors (which are considered the saviour of Kuwait) for the post-oil era.

Even though the prices were exaggerated? That’s a bit of an understatement. And yes, it was much easier to get a loan, but that’s why we have all these people calling for their debts to be canceled, because they needed a loan they couldn’t afford to pay for a house that we as the average Kuwaiti can’t afford.
I’m a 26 year old Kuwaiti, on the verge of getting married, and I’m wondering why the hell I need to rent an apartment instead of being able to afford a small beginner house in my own country. And that was before they changed things.
Should I have been as stupid as so many have been and entered into a loan for 150000, then take the 70000 from the government, and end up paying 300,000 over my lifetime for a house that really should cost 140,000. Add to that a monthly payment that is above and beyond the recommended percentage of my family’s total monthly income?

I like your blog, and I want to learn more about Kuwait’s financial policies and banking, for the reasons above, which is why I’ve been visiting your site. However, I just don’t understand your last couple of posts about the loans.

I thought the amount a bank could lend was regulated by your salary and did not include a maximum of 70,000?
Also, why is it good for the average Kuwaiti to have access to loans that they obviously cannot afford? They might have been able to use it to by an overinflated house, but then would have been in debt for far longer than required.

Yeah, some people will lose big money, but this is business, sometimes you win, and sometimes you lose. And the good thing is, that the biggest losers will be those real estate companies who inflated prices to unbelievable levels for a few square meters of shitty land.

300,000KD eh? I can get a house in Beverly hills for that price!