Kuwait – The Kuwaiti real estate market witnessed significant developments in the third quarter of 2024, with a noticeable balance achieved between residential and investment property sales, amidst a boom in housing and infrastructure projects, said GCC online real estate platform Sakan.

Sakan recently unveiled its latest Q3 2024 report about Kuwait, providing a comprehensive overview of the real estate market in Kuwait. The report highlighted 6 key trends shaping the market, namely:

  • The rise of residential cities: Government housing projects, such as Al-Mutlaa City and South Saad Al-Abdullah City, contribute to the creation of modern urban communities and accommodate the growing demand for housing units.
  • A golden age of infrastructure: Huge investments estimated at $32.6 billion to develop infrastructure, such as roads, airports and railway projects, contribute to boosting economic and real estate activity.
  • Storage crisis and its impact on the market: The challenges facing the storage sector due to high demand and lack of licensed space highlight the need for more regulation and investment in this sector.
  • Changes in property ownership for foreigners: New rules now provide GCC nationals with the same property rights as Kuwaiti nationals in Kuwait, while strict conditions are set for other nationalities to buy real estate.
  • Gulf tourism wave: Expectations of an increase in the number of tourists to 7.4 million by 2028 boost demand for the hospitality and retail sectors, which will positively reflect on the real estate market.
  • Offices: Flight to quality: With more options available, the office market is seeing a shift towards higher quality offices, catering to the needs of businesses seeking better working environments.

Real estate transactions

The Kuwaiti real estate market witnessed strong performance during the third quarter of 2024, with a balance between stability in the value of transactions and growth in the number of deals.

Although the value of real estate transactions remained stable at KWD 853 million, the number of transactions increased by 24%, indicating the market’s focus on smaller real estate transactions, especially in the residential and investment sectors.

Indeed, investment property sales grew by 49.5% in Q3 compared to the same period last year, according to government data. This increase reflects increased interest from buyers in investment apartments, compensating for a weaker commercial property performance.

Despite the challenges facing the commercial real estate sector, this expansion in residential investment reinforces the position of the Kuwaiti real estate market as a promising investment destination in the region.

Residential properties

Housing and infrastructure projects play a vital role in boosting the performance of the Kuwaiti real estate market, as highlighted in the Q3 2024 report. Ongoing major housing projects include Mutlaa City ($30 billion), Jaber Al-Ahmad City ($1.4 billion), and South Saad Al-Abdullah ($6.9 billion), contributing to the creation of sustainable housing opportunities and stimulating economic growth.

Apartment rental prices in Kuwait during the third quarter of 2024 showed clear disparities between governorates and regions, reflecting the diversity of housing options and demand for different properties.

The Capital Governorate topped the list of highest rents, with the average rent for a two-bedroom at KWD 643 per month and a three-bedroom apartment reaching KWD 888 per month. The capital is considered the most attractive due to its proximity to business centers and services.

The Hawalli Governorate came in second, especially in the coast-facing areas of Salmiya and Salwa, where rents reach KWD 550 per month for a two-bedroom apartment and KWD 693 for a three-bedroom apartment.

Investment yields for apartments based on median prices were estimated at 7.6% (two-bedroom) and 9.1% (three-bedroom) in the Hawalli-Salmiya area, and 6.9% (2-bedroom) and 8% (3-bedroom) in the Sabah Al Salem area.

The report also shows housing prices across Kuwait. The average house price in Kuwait was KWD 480,000, with the Capital Governorate leading the way with an average of KWD 750,000.

Commercial real estate

Meanwhile, the commercial real estate sector shows promising growth in the industrial front, where demand for warehouses has caused fluctuations in rates amid low supply.

In the office sector, the supply of competitively priced semi-fitted offices in Kuwait has been putting pressure on rents. Data from Sakan shows that semi-fitted offices averaged at KWD 11.3 per sqm per month in Sharq, KWD 10.1 in Qibla, and KWD 12.3 in Mirqab. In some cases, core & shell condition office spaces in younger buildings are more expensive than semi-fitted spaces.

Shops, on the other hand, commanded an average of KWD 23.6 per sqm per month in Sharq, KWD 23.9 in Qibla, KWD 23.5 in Mirqab, and KWD 25.3 in Hawalli. With retail sales forecasted to grow by 3.1% annually until 2028, the retail property sector is likely to see a positive performance in the coming years.

Sakan’s Kuwait Real Estate Market Report Q3 2024 can be downloaded via the link via the link: https://join.sakan.co/Sakan-Report-Kw-Q3-2024-ar