"The Center" Expects Stability in Gulf Real Estate Markets
The Kuwait Finance House (KFH) released its latest report on real estate sector outlook for the second half of 2026, providing a comprehensive analysis of real estate market performance in Kuwait, the Kingdom of Saudi Arabia, and the United Arab Emirates. The report reviews the performance of the real estate markets in the three countries during the first half of 2026 and assesses key trends expected to influence activity in the remainder of the year. It notes that geopolitical tensions, rising construction costs, and tighter financing conditions have contributed to a slowdown in momentum in the Gulf Cooperation Council (GCC) real estate markets, although their fundamentals remain resilient.
KFH expects Gulf real estate markets to remain in a phase of stability during the second half of 2026, supported by strong macroeconomic indicators, despite a slowdown in momentum compared to the first half of the year. Government policies, infrastructure investments, population growth, and economic diversification efforts are expected to continue supporting long-term demand, with office, industrial, and logistics assets likely to be among the best-performing sectors across the region.
The Kuwaiti real estate market maintained its stability during the first half of 2026, despite a slowdown in investment activity. The total value of real estate sales declined by 5.9% year-on-year, while the number of transactions increased by 1.7%, reflecting the continued strength of underlying demand in the market.
Residential transactions rose by 7.5% year-on-year, partly supported by government housing initiatives and the growing pipeline of planned residential projects, which include more than 140,000 units. Meanwhile, investment real estate continued to benefit from its role as a hedge against inflation amid regional uncertainty.
Looking ahead to the second half of 2026, KFH expects the Kuwaiti real estate market to maintain its stability, as reflected by its Real Estate Sector Index standing at 3.0 out of 5.0. Housing reforms, regulations concerning vacant land, and investor establishment initiatives are expected to strengthen the market’s fundamentals in the long term, while the commercial and logistics sectors continue to benefit from strategic infrastructure projects. Commercial real estate sales rose by 34.4% year-on-year, indicating sustained demand in this sector.
