Al-Nuaim to 'Al-Siyasah': Real Estate Financing Reshapes the Residential Market Map

Calls for supporting land and construction materials and regulating developers’ profits to ensure affordable prices

The law restricts financing to units from approved developers and government plots... and does not cover buying homes from individuals or renovating private properties

Three housing pathways for citizens... and the success of the initiative hinges on the quality and cost of units, as well as families’ ability to afford installments

Real estate and commercial transactions expert Mansour Al-Nuzhan affirmed that the new Real Estate Financing Law No. 114 of 2026 could bring fundamental changes to Kuwait’s residential market by directing a portion of citizens’ purchasing power toward new cities and projects developed by approved real estate developers, which may impact demand levels and prices in existing residential areas.

Al-Nuzhan, in exclusive comments to "Al-Siyasa," explained that reading Article Two of the law and its explanatory memorandum necessitates careful consideration of the scope of financing and the purposes it covers, along with their potential implications for housing applicants’ options. He emphasized that the success of this initiative requires the availability of residential units of appropriate quality and prices aligned with citizens’ incomes, particularly those with middle incomes.

Al-Nuzhan stated that Article Two defined the law’s scope under two main objectives: first, purchasing a residential unit from a real estate developer in accordance with the provisions of Law No. 118 of 2023 concerning real estate developers; and second, constructing homes on government plots allocated by the Public Authority for Housing Welfare, whether already completed, under construction, or other plots specified by the Council of Ministers, subject to approved conditions and regulations.

He added that this scope means that financing regulated under the law does not cover buying an existing home from another citizen outside the framework of an approved real estate developer. Nor does it extend to building a house on private land purchased by a citizen from the market, financing the expansion of an existing home by adding floors and rooms, or carrying out renovation and maintenance works.

He noted that, according to these provisions, the law aims to support the purchase of residential units provided by approved developers and the construction of specified government plots, which differs from the needs of citizens wishing to buy existing properties or develop homes they already own.

Shift in demand may put pressure on prices of existing homes

Al-Nuzhan believed that directing subsidized financing toward units covered by the law could contribute to shifting a portion of demand and liquidity from existing residential neighborhoods to new cities and projects. This may reduce the number of potential buyers for homes listed in the traditional market, prompting some owners to lower their prices to maintain the attractiveness of their properties.

He clarified that a citizen with a housing application may prefer, when appropriate conditions are met, to purchase a modern unit from an approved developer and benefit from long-term affordable financing, rather than buying an old home for hundreds of thousands of dinars and relying on a personal loan or higher-cost commercial financing.

He added that this shift may also affect real estate speculation patterns, particularly the purchase of old homes with the intent to demolish them, subdivide them, and resell them. The decline in demand for such properties may limit their investment appeal.

He stressed that the law’s impact on prices will depend on several factors, most notably the volume of new units available, their prices, financing conditions, and citizens’ ability to benefit from it. He pointed out that expectations of declining prices for existing properties remain tied to actual market developments, and their magnitude cannot be predetermined.

Three pathways for citizens

Regarding concerns over rising prices of units developed by real estate developers and their impact on monthly installments, particularly for middle-income earners whose salaries amount to approximately 1,500 Kuwaiti dinars per month, Al-Nahyan emphasized the importance of preserving diverse housing options for citizens.

He clarified that the first pathway involves purchasing a ready-made house or a residential unit from an approved real estate developer. This option suits those who prefer moving into a completed home or avoiding the burdens of overseeing construction works and contracting with builders.

The second pathway consists of traditional self-building, where a citizen is allocated a government plot and utilizes housing finance provided by the Kuwait Finance House, amounting to 70,000 dinars under the current regulations. In this scenario, the citizen constructs their own home under their own supervision.

The third pathway involves waiting for ready-made government houses implemented by the Public Authority for Housing Welfare and distributed to citizens according to established housing controls and priorities.

Al-Nahyan stressed that maintaining these pathways gives citizens the opportunity to choose the alternative best suited to their families’ needs and financial capabilities, preventing housing solutions from being practically limited to units provided by real estate developers.

Support for Land and Construction Materials and Profit Regulation

Al-Nahyan affirmed that the success of the real estate developer model requires providing residential units that combine quality with appropriate pricing, so that facilitations granted to developers do not translate into higher final prices at the expense of citizens.

He called for the executive regulations to include clear mechanisms to support land and construction material costs. This could be achieved by allocating land to developers at nominal prices or through suitable support formulas, and by providing subsidized construction materials under controls that ensure these advantages are reflected in the selling price to the end beneficiary.

He proposed studying the possibility of offering residential units priced between 100,000 and 150,000 dinars, considering these as target price levels. Their feasibility should be assessed based on land and construction costs, unit specifications, and financing conditions, thereby contributing to making installments more affordable for middle-income earners.

He also called for establishing fair regulations for developer profit margins, noting that a margin ranging between 10% and 15% could be studied as a regulatory proposal. This would achieve a balance between investment sustainability and consumer protection, ensuring that citizens are not burdened with excessive costs.

Furthermore, he emphasized the importance of providing flexible housing models that can be expanded in the future, meeting the changing needs of Kuwaiti families and offering practical options for privacy and family growth, while adhering to approved engineering and regulatory requirements.

Citizens’ Ability to Afford Installments as a Measure of the Law’s Success

Al-Nahyan concluded by affirming that the success of the housing finance law is not measured solely by the number of units implemented by developers or the speed of project completion, but by the extent to which citizens can own suitable homes without installments becoming financial burdens exceeding their capabilities. He added that achieving housing objectives requires effective monitoring of prices and construction quality, transparency in financing and contracting terms, alongside a balance between encouraging real estate investment and protecting beneficiaries, while preserving other housing alternatives.

He confirmed that the new housing finance system could help reshape the residential market, but realizing its positive impact depends on the availability of competitively priced units and ensuring that citizens benefit from any state facilitations offered to developers. This would enhance homeownership opportunities and achieve a balance between citizens’ interests and the real estate sector.