Real estate boom continues, 2026 outlook supported by new laws and easing rates: NBK

Real estate sales in Kuwait reached an all-time high of approximately 4.4 billion dinars in 2025, supported by strong activity in the final quarter of the year, according to a report by the National Bank of Kuwait.

The bank said fourth-quarter sales were particularly robust, driven by a sharp rise in residential transactions and continued strength in the commercial segment. Total real estate sales during the last three months of the year reached 1.3 billion dinars, surpassing the previous quarterly peak recorded in the second quarter of 2014.

Residential sales climbed to 587 million dinars in the fourth quarter, rising 48% compared with the previous quarter and 29% year-on-year, marking the strongest quarterly performance since the third quarter of 2021, reports Al-Qabas daily.

A major contributor was a surge in residential plot sales in the Sabah Al-Ahmad Sea City area, which totaled 129 million dinars. The increase was linked to landowners selling vacant plots ahead of the implementation of the anti-land monopoly law at the start of 2026.

Excluding those transactions, residential growth would have been more moderate, while the overall value of real estate transactions would have recorded a slight quarterly decline.

Commercial real estate, often the most volatile segment, remained active at 303 million dinars, supported by large deals including land sales in Farwaniya and Kuwait City worth 63 million dinars, as well as the sale of two commercial buildings in Hawalli Governorate and Kuwait City valued at 60 million dinars. Investment property sales also rose, though at a slower pace, despite a decline in the number of transactions.

For the full year, total sales increased by around 27% compared with 2024, marking the strongest annual performance in more than two decades. Commercial sales reached a record 953 million dinars, while investment property sales posted the fastest growth, rising 39% to 1.67 billion dinars.

Residential sales advanced 14.3% to 1.75 billion dinars, although the average value per residential transaction fell by 5.2%, suggesting a shift toward smaller or more affordable properties in outer areas.

The report said investor focus appeared to be shifting toward income-generating assets in the investment and commercial segments, partly due to easier monetary conditions. Regulatory amendments to building rules for investment housing, measures to limit speculation in private housing, and the activation of the anti-land monopoly law have helped redirect liquidity.

Changes introduced in mid-2025 allowing non-Kuwaiti entities — including listed companies, funds and investment portfolios — to own property, excluding private housing, also supported market activity. The real estate index on the Kuwait Stock Exchange rose nearly 50% in 2025, while real estate credit grew by 5.2%.

Looking ahead, the outlook for 2026 remains positive. Expectations of further monetary easing, legislation enabling foreign ownership in certain segments, and anticipated approval of the mortgage finance law are seen as supportive factors.

Housing Projects and Rising Demand

The Public Authority for Housing Welfare continued infrastructure work on major housing developments during the fourth quarter, with progress varying by project. Completion of main roads in South Saad Al-Abdullah reached 49.2% by October 2025, while work in South Sabah Al-Ahmad reached 75.8% by the end of December. Contracts were also signed for electricity network construction in South Sabah Al-Ahmad.

The authority launched prequalification invitations for three large residential development sites — Al-Mutlaa, East Saad Al-Abdullah, and West Saad Al-Abdullah and Jaber Al-Ahmad — as part of a shift toward long-term development contracts under a real estate developer model.

Meanwhile, housing demand continued to rise. The suspension of housing voucher distribution since July 2024, pending new legislation including the Real Estate Finance Law, pushed housing applications up to 103,110 by mid-2025. Kuwait Credit Bank data showed quarterly growth in government housing loan approvals late in the year, although annual approvals declined compared with 2024.