Kuwait Property Transactions Soar by 34% in 2024
Kuwait’s real estate sector has witnessed an impressive 34% growth in transaction values in 2024, reaching KD3.73 billion (approximately $9 billion). This surge is being attributed to a combination of factors, including the rising demand for housing, limited land availability, and the country’s growing expatriate population. Residential properties, accounting for a substantial KD1.5 billion, have led the way in this increase, with the majority of deals in the sector concentrated in Kuwait City.
In total, the market saw 4,950 property transactions in 2024, compared to 4,442 deals in the previous year, reflecting the sustained demand for real estate in the region. Notably, despite this overall growth, the coastal strip of the country experienced a downturn, with transactions here declining by 44%. The real estate market in Kuwait continues to be influenced by factors like the influx of foreign workers and expats, which make up 73% of the nation’s 4.3 million population. With this large expatriate community vying for limited housing, the competition for space in urban areas, particularly Kuwait City, remains fierce.
Rising Property Prices and Demand for Housing
The surge in property prices in Kuwait City has placed the country in the spotlight for global real estate analysts. The median apartment price to family income ratio in Kuwait stands at a staggering 7.5, which is substantially higher than neighbouring regions such as Saudi Arabia and the UAE, where the ratio is around 3 and 4 respectively. In fact, Kuwait City now ranks higher than several major global cities, including Luxembourg City, Cambridge, and San Francisco in terms of housing affordability. This places an additional burden on local families and expats alike, creating a divide between those able to afford property and those who cannot.
The growth in Kuwait’s real estate market is largely driven by the scarcity of land and the slow pace at which new developments are completed. The lack of available land for new construction, combined with the extended timeframes required for infrastructure development, has contributed to the hike in housing prices. Furthermore, demand continues to exceed supply, resulting in a market where the cost of living—particularly housing—is becoming increasingly unaffordable for many residents.
The Role of Expats and Economic Factors
The heavy reliance on expatriate workers has had a significant impact on the property market. As the majority of the country’s population consists of foreign workers, their demand for housing keeps prices high, especially in areas such as Kuwait City. The competition for limited housing stock, compounded by the higher prices, has raised concerns about the sustainability of this market in the long term. Economic factors, such as the rising cost of living, are likely to continue exerting pressure on the real estate market, posing a challenge for both locals and expatriates.
Given the substantial role played by the expatriate community in Kuwait’s real estate market, there is also a need for better housing policies that ensure more equitable access to affordable accommodation. Regulatory changes in the future may be required to address this imbalance and make housing more accessible to a wider demographic. The real estate sector in Kuwait, while thriving, faces several challenges in the context of its socio-economic landscape, making it imperative for authorities to focus on creating a balanced and sustainable market.
Sustainability Concerns in Kuwait’s Property Market
The rapid escalation in housing prices, particularly in Kuwait City, raises concerns about sustainability in the long run. While the real estate market continues to grow, it is vital that developers and government bodies integrate sustainable practices into new developments. This includes designing energy-efficient buildings, implementing waste reduction strategies, and considering renewable energy sources. As the country works to diversify its economy beyond oil, there is an opportunity to make its urban landscape more environmentally responsible and socially inclusive.
Kuwait’s real estate growth should be seen as an opportunity to not only expand the sector but also enhance the overall quality of life for residents. With an increasing focus on sustainability and eco-friendly construction, the real estate market can contribute positively to the future of Kuwait, ensuring that both the environment and its people are taken into consideration as the city continues to grow.
