From inner stability to outer declines; how location is driving housing prices

Coinciding with a correction phase recently witnessed in Kuwait’s residential sector — during which prices in some areas fell by an estimated 25 to 36 percent — market activity has picked up in other locations, with higher transactions and improved liquidity.

This divergence confirms that the price correction is selective and geographically uneven, prompting renewed questions about the drivers shaping private real estate prices in the local market.

Official data show that the average value of a single private housing transaction declined in 2025 to around KD 414,000, compared with KD 437,000 in 2024, reflecting the broader adjustment under way.

In practice, the variation in prices between regions is not a new phenomenon, but rather an extension of long-standing disparities between inner and outer areas. As such, there is no single benchmark to define the overall direction of the private housing market: declines in some districts are being offset by stability or even increases in others.

Recent transactions illustrate this contrast. Areas such as Abdullah Al-Salem, Shuwaikh and Al-Nuzha have recorded what specialists describe as “astronomical” deals, while prices have remained flat or declined in Al-Qadsiyah, Al-Adailiya, Al-Mansouriya, Al-Faiha and Qortuba. The sharpest corrections — ranging between 30 and 35 percent — have been observed in districts located beyond the Sixth Ring Road, which had previously seen steep price increases.

Analysts attribute this disparity largely to structural factors. Central and strategically located areas close to the capital have historically commanded high prices due to sustained demand and limited supply, enabling them to absorb market shocks more effectively. By contrast, outer districts — where demand is weaker and speculative activity was once prevalent — have been more exposed to the correction.

As a result, while some areas are now witnessing deals at notably lower prices, others continue to set record levels unseen before in the residential sector.

Two real estate experts told Al-Rai that the market is undergoing a restructuring phase in which prices are being redefined according to location, genuine demand and supply dynamics. They noted that the impact of regulatory developments — such as the Real Estate Developer Law and anticipated real estate financing — has varied significantly between inner and outer regions.

Businessman and real estate expert Qais Al-Ghanim said the recent decline has not been uniform, with the steepest drops concentrated in low-demand outer areas. In contrast, districts close to the capital have shown greater price stability, supported by long-standing and continuous demand.

He added that announcements of new housing projects tend to increase price pressure, as expectations of future supply often translate into immediate downward adjustments.

Geographically, Al-Ghanim divided the market into three bands:

• From the First to the Third Ring Road, prices have seen only slight declines, alongside continued high-value transactions in areas such as Abdullah Al-Salem, Shuwaikh and Al-Nuzha, where demand remains strong and supply limited.
• Between the Third and Sixth Ring Roads, declines have been moderate and largely driven by normal supply-and-demand factors, with areas like Al-Qadisiyah and Al-Adiliyah recording limited, non-alarming adjustments.
• Beyond the Sixth Ring Road, prices have suffered the sharpest correction — 30 to 35 percent — largely due to the exit of speculators. Purchases in these areas are now driven mainly by genuine housing needs rather than investment motives.

Real estate expert Suleiman Al-Dulaijan said the market has entered a repricing phase that reflects the true value of each area, leading to uneven declines. He explained that the recent rise in transactions is largely the result of increased supply of vacant land, rather than stronger real demand.

He also noted that concerns over the implementation of vacant land fees have encouraged owners in historically inflated areas to sell, accelerating price adjustments there compared with districts enjoying stable, end-user demand.

According to Al-Dulaijan, around 80 percent of speculators active in the private housing market in previous years have now withdrawn, leaving speculation limited to specific locations.

Private housing price movements can be summarized as follows:

• First to Third Ring Road: Broad stability with slight declines and continued high-priced deals.
• Third to Sixth Ring Road: Moderate, “normal” declines shaped by supply and demand.
• Beyond the Sixth Ring Road: The steepest correction in the market, with prices down 30–35 percent amid the disappearance of speculation.