Kuwait Real Estate

Executive Summary

There are many tailwinds today and four of them can have impact on the real estate market of Kuwait. After showing extraordinary strength during the last few years, oil prices started tumbling recently creating panic.

After a long period of low interest rates, the market expects Fed to start the interest rate rise soon which may impact many asset classes but more specially the real estate. Effect of implementing Basel III norms to real estate lending and usage of real estate assets as collateral, are expected to have an impact on the asset class. And finally, the geopolitical tailwinds in the Middle East region always induces additional risk premium.

In this report, we analyze the impact of these events for the Kuwait Real Estate market. The three key components of the real estate market in Kuwait include Residential, Investments and Commercial real estate properties. During 2013, residential real estate, also labeled as private housing, accounted for around half of the market (49 per cent) in terms of total value of the deals made, followed by investments (38 per cent) and commercial (11 per cent) sectors.