Real estate transactions in Kuwait have seen significant fluctuations in the number of deals in recent years, though the total values in some sectors have remained largely unaffected. A study prepared by Al-Qabas sheds light on the current status of the residential, commercial, and investment sectors, focusing on changes in values and emerging trends.
According to the figures, residential real estate has seen a notable decline over the past 6 years. From 2019 to 2024, total residential transactions decreased by 25.4%, with the number of transactions dropping to 3,527, compared to 4,728 transactions in 2019.
All governorates recorded a significant decrease in the number of real estate transactions, with Mubarak Al-Kabeer Governorate being the most affected. Residential transactions in the governorate dropped from 1,317 in 2019 to just 471 last year.
In contrast, the period between 2019 and 2021 saw a significant increase of 90.37% in total residential transactions. The number of transactions in 2021 surged to around 9,001, compared to 4,728 in 2019.
The year 2021 can be considered an exceptional year for real estate transactions, as all governorates—except for Mubarak Al-Kabeer and Jahra—achieved their highest transaction levels since 2019.
In 2021, Ahmadi Governorate recorded the highest number of residential transactions, reaching 5,579. The capital followed with 756 transactions, while Hawalli Governorate saw 930 transactions. Farwaniya Governorate recorded 614 transactions during the same period.
Investment and Commercial Transactions
Investment and commercial transactions in Kuwait have experienced noticeable fluctuations over the past six years. Investment transactions saw a decline of 31.2%, with the number of transactions dropping to 1,218 last year, compared to 1,770 transactions in 2019.
In the investment sector, deals decreased by 58.5% in 2020 compared to 2019, falling to 1,770 transactions. However, these deals saw a slight recovery in 2021, rising by 55.4% to reach 1,141 transactions.
The commercial sector recorded a significant decrease of 71.4%, with the number of deals falling to 135 in 2024, compared to 472 in 2019. The year 2021 was particularly challenging for the commercial sector, as trading declined by 81.8%, with the number of deals dropping to just 86, compared to 472 in 2019.
Real Estate Deals
Despite the significant decline in the number of real estate transactions across various sectors, the residential sector experienced only a slight decline of 1% in the total value of transactions, dropping from KWD 1.57 billion in 2019 to KWD 1.55 billion. This decline can be attributed to several factors, most notably the COVID-19 pandemic and its clear impact on demand and supply. Additionally, general economic trends such as interest rates and market conditions likely contributed to these changes.
In contrast, the commercial sector recorded a slight increase of 2% in the total value of trades, reaching 745.4 million dinars last year, compared to 619.2 million dinars in 2019. Despite this increase in value, the decrease in the number of deals suggests that the negative impact of the COVID-19 pandemic is still affecting the commercial sector.
The investment sector saw a slight increase in its total value by 0.6%, reaching 1.22 billion dinars compared to 1.21 billion dinars in 2019. This increase reflects a rise in prices driven by the effects of the COVID-19 pandemic and indicates modest stability and investor confidence in the market.
4 Main Reasons for Rising Property Prices
The real estate market in Kuwait is facing challenges due to rising prices caused by a lack of supply and increasing demand, which continue to exert pressure on the market.
Additionally, the lingering effects of the COVID-19 pandemic have impacted not only real estate but also goods and services, further influencing market conditions. The following are most prominent reasons:
- The increase in construction costs due to significant increase in material costs, which led to an increase in real estate prices.
- The shortage of workers directly caused by the Corona crisis.
- Many economic changes, including in oil prices and monetary policies, which in turn affect real estate demand.
- Market trends, as some investors prefer foreign real estate over the local market.
Effective Strategies
Addressing the challenges of rising real estate prices in Kuwait requires effective strategies to bridge the gap between supply and demand and revitalize the market.
