Al-Mutairi: Earthquake of 'breaking the monopoly'... 10 positive repercussions on the real estate market

Six months after the law’s effective implementation in the sector

Najah Bilal

Six months after the enforcement of the Anti-Land Monopoly Law, has it succeeded in creating a positive shock in the structure of the real estate sector? In this context, economic expert Nasser Al-Mutairi stated in a special interview with "Al-Siyasa" that the actual start of implementing progressive fees and applying the provisions of Law No. 126 of 2023, which began in early March last year, succeeded in breaking the stagnation of the real estate market and dismantling the monopolistic channels that had dominated private housing plots for decades.

He clarified that the market has begun reaping the fruits of this vital legislation through a package of initial and structural results that contributed to enhancing justice and expanding the base of real estate supply available to citizens.

Key Results

Al-Mutairi summarized the most significant positive outcomes achieved in the real estate market following the implementation of this law in 10 main aspects. The first is the noticeable decline in the phenomenon of monopolizing large residential plots. The law contributed to reducing the free ownership allowance permitted for citizens from 5,000 square meters to just 1,500 square meters. He pointed out that this strict limitation forced major landowners to relinquish excess areas to avoid steep progressive fees, resulting in a clear reduction in the ability of individuals and entities to hoard land without actual utilization.

Regarding the second result, he noted that the law’s application led to a significant expansion in the supply of residential land and a decrease in the intensity of speculation. Consequently, hundreds of vacant plots shifted from channels of hoarding and unproductive speculation to direct supply channels in the market.

Furthermore, price trends began to move toward stability and relative improvement due to the increased options available to serious buyers; this is the fourth fruit. The fifth result consisted of the gradual disappearance of fake turnover and artificial speculation, which had previously inflated market values without justification.

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The sixth fruit was that the application stimulated construction activities and revitalized urban development. Over the past six months, there has been growing interest among landowners in obtaining building permits and commencing actual real estate development. This has revitalized the contracting and building materials sectors and set in motion the economic engine linked to urbanization.

The seventh result involved curbing the role of financing entities in private housing. The strict ban imposed on companies and individual institutions to prevent them from owning, selling, or mortgaging private residential plots protected this sector from the massive liquidity that had previously competed with citizens. Banks’ roles were restricted to financing only one residential property for a client who does not own private housing, thereby returning the private housing sector to its fundamental social function as a citizen’s livelihood need rather than as an investment tool.

The eighth result came in the form of supporting the state’s general budget through fair tax channels. The Ministry of Finance began collecting the due fees at a rate of 10 dinars for every square meter exceeding the permitted limit. Furthermore, this value will increase progressively by 30 dinars annually until it reaches 100 dinars per square meter. Thus, these fees provided the state with a sustainable financial source that achieves economic justice and promotes the optimal utilization of land.

State Budget

The ninth aspect concerns the positive impact on the state budget. Al-Mutairi noted that implementing the law combating the hoarding of vacant land directly and positively affects the general budget of the State of Kuwait. It contributes to developing non-oil revenues and reducing the government’s financial burden stemming from housing care commitments. Moreover, it ensures a continuous flow of cash to the Ministry of Finance from unused land coupons, which supports budgetary allocations for infrastructure projects and services. This new tax helps advance the state’s plan to increase the share of non-oil returns, thereby alleviating financial pressure on the housing care budget.

The tenth outcome emerged in the accelerated pace of private construction, which helps ease housing demand waiting lists. By curbing price inflation, it reduces the value of loans and financing allowances granted by the Credit Bank, thereby lowering the government’s capital burden. This opens the door to indirect partnership in development while rationalizing spending on infrastructure. Al-Mutairi concluded that this law improves the levels of economic activity, which positively reflects on the performance of companies and customs authorities.