New Housing Law signals Kuwait’s commitment to private sector growth

The Government of Kuwait is accelerating economic and housing reforms aimed at solving the long-standing housing crisis and revitalizing the economy.

The centerpiece of this effort, according to Al-Rai daily, is the Cabinet-approved amendments to the Housing Cities Construction Companies Law (No. 118 of 2023), which seek to enable strategic partnerships with the private sector to deliver sustainable and diverse housing solutions without overburdening the state budget.

The following are the key points from the summary:

Reforms Target Housing Crisis: The changes are designed to cut long waiting times, address the accumulated 98,000 housing applications, and enable citizens to own suitable homes, shifting from the outdated “land and loan” model.

Strategic Role of Private Sector: The law empowers real estate developers, allowing them to contribute to building modern housing cities under public-private partnerships, with oversight and capital sharing, potentially leading to stock market listings and investment opportunities.

Broader Economic Goals: By enabling diverse housing options tailored to family size and financial capacity, and encouraging foreign expertise, the reforms aim to stimulate employment, private investment, and the real estate market, while easing pressure on public finances.

Support from Experts and Officials:

Former Minister of Justice and Minister of State for Housing Affairs Faleh Al-Raqaba said the law will eliminate waiting lists and activate long-awaited housing projects.

Ibrahim Al-Awadhi, Chairman of the Real Estate Association added the state is changing its philosophy, supporting feasibility studies and diverse housing alternatives.

Former Minister of Public Works and Minister of State for Youth Affairs Ali Al-Mousa noted, “This is a message of hope and a bold step requiring real implementation.

Economic Society member Mohammed Al-Ju’aan explained that establishing partnerships within the framework of joint regulatory agreements with international operators and specialized Kuwaiti real estate development companies will ensure the success of the new housing cities.

Former Minister of Commerce and Industry Fahad Al-Shariaan stated the success hinges on private sector empowerment, regulatory oversight, and regional experience.

Reem Real Estate CEO Khaled Ali Al-Sagheer said, “The move introduces the “real estate developer” model, expands housing product options, and allows real estate financing to better suit citizens’ needs.

Overall, the amendments are seen as a qualitative leap in tackling housing at its root while transforming the sector into a driver of economic and social development.

Housing Sector Overview (End of 2024)

According to official data and government studies, the following key figures highlight the current state of Kuwait’s housing sector:

• 97,671 housing applications remain pending with the Public Authority for Housing Welfare (PAHW).
• 32,996 real estate loans are required, with a total estimated value exceeding 2.309 billion Kuwaiti dinars.
• 23,227 real estate loans are currently available, valued at more than 1.625 billion dinars.
• 9,769 mortgage loans are unavailable, amounting to a shortfall of approximately 683.83 million dinars.

The estimated cost to fulfill current and allocated residential care demands ranges between 60 and 65 billion dinars.

The total cost of land, infrastructure, and subsidies to cover all housing applications is projected at 100 billion dinars.

According to informed sources, the most notable amendments to the law are as follows:

• Article 2 Amendment: The decision to establish companies shall consider the nature of each project individually, based on feasibility studies, without specifying the company’s form, legal structure, or capital size.
• Deletion of Articles 3 and 6: Following the revision of Article 2, Articles 3 and 6 have been removed. Matters related to company capital and subscription procedures will now be governed by existing applicable laws.
• Article 5 Amendment: Company share allocations will be based on feasibility studies and the willingness and capability of government entities to participate in individual projects.
• Article 11 Amendment: Developers are granted broader authority to offer various products tailored to the diverse needs and financial capacities of eligible families across different areas. Developers will now assume the demand risk and are expected to conduct market research to understand target beneficiaries.
• Deletion of Articles 10 and 19: These articles were removed to allow the executive regulations to define company obligations more clearly and flexibly.
• Addition of Article 31 (bis): The Authority will define the controls, standards, and technical specifications for all project components, including residential, investment, industrial, craft, service, and commercial areas.
• Addition to Article 32: A new paragraph enables the Corporation to apply this law to all cities and areas—residential or otherwise—under its purview, including any land designated by its Board of Directors, enhancing the Corporation’s ability to execute such projects more broadly.