Kuwait Finance House: 0.3% quarterly decline in private housing prices
Hamad Al-Hisaawi, Executive Director of Real Estate Valuation at Kuwait Finance House (KFH), stated that transactions in real estate sectors during the second quarter of this year highlighted the significance of the private residential sector in driving market activity and its prominent standing among traders, accounting for nearly half of the total transaction volume, which reached KD 907.5 million in Q2 2026.
Al-Hisaawi noted in a statement that private residential transactions accounted for 47% of total real estate transactions, a notable increase from the 38.5% share recorded in the previous quarter, securing the top position in Q2 2026. Investment real estate remained in second place among real estate sectors, capturing 31.6% of transactions in Q2 2026, up from 28.5% in Q1 2026. Commercial real estate followed in third place, with its share declining to 12.4% in Q2 2026 compared to 21.0% in Q1 2026. Transactions in other real estate categories accounted for 8.9% of total activity, driven by trading in agricultural nurseries, which alone represented 3.2% of total transactions. This was followed by warehouse transactions, which held a 3.0% share, while waterfront property transactions accounted for approximately 2.6%. Meanwhile, artisanal real estate transactions constituted just 0.1% of the total value of real estate transactions in Q2 2026.
He added that the value of real estate transactions reached KD 907.5 million in Q2 2026, according to data and indicators from the Registration and Documentation Department, compiled monthly by the Kuwait Ministry of Justice. This represents an 11.4% decrease from the high level recorded in Q1 2026, yet remains significantly higher by 15% on a year-on-year basis.
According to a report issued by KFH, prices for private residential properties declined by 0.3% at the end of Q2 2026 compared to the previous quarter, recording a 5.7% annual decrease. In contrast, prices for investment real estate rose by 1.6% on a quarterly basis, marking a 7.0% annual increase. Commercial real estate prices also increased by 0.2% on a quarterly basis and by 4.1% on an annual basis.
The Kuwaiti real estate sector maintained its position as one of the most prominent non-oil sectors during Q2 2026, supported by the stability of the local economic environment, the strength of the banking sector, and sustained demand for various property types.
Data for Q2 2026 showed continued momentum, with the number of real estate transactions reaching 1,494 deals in the quarter, totaling KD 907.5 million. Although this volume represented an 11.4% decline from Q1 2026, the number of transactions increased by 12.8% compared to the same period last year. The residential sector remained the most active in terms of both transaction value and volume, while waterfront properties and warehouses contributed to boosting the total transaction value, driven by higher trading values in these categories.
This performance was supported by growth in non-oil activity, continued capital expenditure and government projects under the Development Plan and Kuwait Vision 2035, alongside strong banking liquidity and growth in mortgage credit. Despite the market being affected by external factors such as geopolitical tensions, unprecedented fluctuations in oil prices, and anticipation of global monetary policy trajectories, the real estate sector demonstrated clear resilience, driven by domestic demand and improved investor confidence. Furthermore, the positive future outlook was bolstered by potential legislative reforms, particularly the development of mortgage financing and discussions surrounding a mortgage law, which are expected to sustain real estate activity in the coming period on a more balanced path.
Trading value remained at an average level, down 14.3% in the second quarter of 2026 compared to the high recorded in the same period last year. The coastal strip and warehouse categories continued to witness notable activity, while private residential trading value saw limited growth. A modest increase in demand for various property types was observed, reflected in a 2.1% year-on-year rise in the number of transactions, driven by a limited increase in demand for private residential properties. In contrast, demand for commercial and warehouse property categories doubled year-on-year, while demand for investment properties and other real estate sectors declined year-on-year.
Trading value accumulated on a monthly basis during the second quarter of 2026 rose compared to the previous quarter, driven by an increase in private residential trading value to approximately 426.6 million Kuwaiti dinars in Q2 2026, up 8.2% quarter-on-quarter. Demand for this category rose to 1,106 transactions, a 23.3% increase for the same period. Meanwhile, investment property trading declined to 287.1 million dinars in Q2 2026, down 1.6%, with quarterly demand falling to 328 transactions, a decrease of 1.8%. Commercial property trading value also fell, recording 112.9 million dinars, a 47.4% quarter-on-quarter decline, despite an increase in demand for this category to 45 transactions, up 7.1%. Trading value for coastal strip properties increased to approximately 23.5 million dinars across four transactions in Q2 2026, more than doubling the value recorded in Q1 2026. Conversely, trading value for artisanal properties dropped to 700,000 dinars, while warehouse properties reached an exceptional level of 27.5 million dinars across eight transactions in Q2 2026. For the second consecutive quarter, nursery properties witnessed notable activity in Q2 2026, valued at 29.2 million dinars across just two transactions.
The average total transaction value index decreased, recording 607,000 dinars in Q2 2026, down 16.1% year-on-year and by a notable 21.5% quarter-on-quarter.
