1.64 billion dinars in real estate transactions since the start of the war in the region
The atmosphere of war raging in the region since February 28 did not dampen the momentum of the local real estate market. Despite the turbulence of geopolitical developments, trading volume reached approximately KD 1.64 billion through 2,541 transactions between March and September this year. The private residential sector continued to lead activity with a value of KD 727.3 million, despite a roughly 30 percent decline in its transaction pace, pressured by regional developments and recent regulatory measures.
According to data from the Ministry of Justice’s Real Estate Department, the private residential sector accounted for the largest share of transactions, totaling 1,834 deals, representing 44.3 percent of the total value and 72.2 percent of the number of transactions. The investment sector came second with KD 558.22 million across 617 transactions, followed by the commercial sector with KD 256.05 million through 67 transactions, the industrial sector with KD 39.31 million via 10 transactions, the coastal strip with KD 34.25 million through 11 transactions, and the agricultural sector with KD 29.16 million across two transactions.
These figures reflect a relative stability that has characterized the market over the past six months, amid exceptional factors that have imposed a global and regional economic and financial reality. Furthermore, the usual slowdown in trading activity during the summer months did not disrupt the stability of the real estate market.
For his part, real estate expert Qais Al-Ghanim told Al-Rai that the decline in real estate trading activity over the past period was not the result of a single factor, but rather stemmed from a combination of developments, foremost among them the regional situation and the war, alongside recently issued laws and regulatory decisions that impacted the market.
Al-Ghanim clarified that the war was the most influential factor, affecting not only buying and selling activity but also the psychology of market participants, particularly investors with limited capital who become more cautious in their investment decisions during periods of instability. He added that reduced trading activity during wartime naturally reflects on the real estate market, noting that some recent regulatory measures and laws also contributed to cooling transaction volumes.
Al-Ghanim pointed out that the private residential market in Kuwait is currently concentrated in four areas that rely heavily on cash availability: Shuwaikh, Shamiya, Dahiya, and Al-Nuzha. He noted that these areas enjoy strong demand and have seen price increases, whereas demand in other private residential areas appears more ordinary.
He highlighted that certain measures taken by the Ministry of Justice, including the cancellation of some forms of real estate agencies, the regulation of transaction mechanisms, and the requirement for certified checks, contributed to calming the market and reducing speculative activity. He emphasized that “cash is the ultimate decision-maker” in the real estate market, and that buyers’ purchasing power remains the decisive factor in determining price trends and trading volumes.
In this regard, real estate expert Sulaiman Al-Dulijan told Al-Rai that the real estate market has recorded an increase in trading volume since the outbreak of the regional war, compared to the same period last year, with growth rates ranging between 20 and 30 percent. This rise is attributed to geopolitical developments in the region since February 28, coinciding with the ongoing war in the Middle East, as well as the impact of the implementation of vacant land fees.
Al-Dulayjan pointed out that if the “no war, no peace” scenario persists until the end of the year, there will be no negative impacts on the real estate market. He explained that the residential sector saw an increase in trading volume alongside declining prices during the six-month period from the end of February, while the investment sector remained stable as market participants began comparing returns with bank deposit interest rates, leading a significant segment to favor investment real estate for its higher yields.
Al-Dulayjan noted that several factors bolstered activity in the investment real estate sector, including the stability of the economic environment thanks to government support and measures taken to counter the war’s repercussions, which successfully ensured the availability of basic commodities despite wartime pressures.
For his part, Khaled Al-Sagheer, CEO of Rim Real Estate Company, told Al-Rai that the real estate market experienced exceptional conditions in recent months, which affected trading activity and prices. The beginning of the year coincided with the holy month of Ramadan, followed by the outbreak of the Iran-US conflict, before the market entered the summer holiday period, which typically witnesses a decline in real estate activity.
Al-Sagheer added that these developments, along with the impact of the vacant land law, put downward pressure on prices and led to a drop in trading volumes. He noted that the decline in activity does not necessarily reflect weak demand, but rather a state of anticipation that dominated market participants in recent times.
He indicated that the market is currently entering the fourth quarter of the year, a period that typically witnesses an expansion in trading activity. He expects that current prices will stimulate the appetite of investors and market participants, especially as prices for some assets have reached levels that have become more attractive for purchase, and returns are beginning to adjust in line with the new price levels.
Al-Sagheer noted that the real estate market has actually begun correcting its conditions in recent months, paving the way for a gradual return of activity, particularly with idle capital waiting for clarity and stability in the situation.
He predicted that trading levels would improve by the end of the year or the beginning of next year, especially if regional conditions stabilize completely, alongside the issuance of new positive regulatory measures or decisions that would support the market and stimulate trading activity.
