Is Kuwait a Good Market for Real Estate Investors?

Kuwait is one of the smallest and wealthiest countries in the Middle East. It has one of the best real estate markets in the region, expanding and attracting investors. In this article, we’ll be sharing what makes it a good market for investing.

Kuwait is an oil-producing nation, though the real estate sector is also a significant part of its GDP. What attracts investors is its financial standing, stable inflation rates, and high per capita GDP.

While the laws and regulations have yet to change significantly enough to make investing in property in Kuwait easier, foreign nationals are finding ways to get into this promising market. To invest, you’ll need to be from Bahrain, Oman, Qatar, Saudi Arabia, or the UAE. In fact, the country’s population has grown to over 4 million, and almost half of its nationals are not Kuwaiti.

The country is, however, in the process of creating new foreign ownership regulations in designated areas and a limited capacity. This has caught the eye of investors who want to get their share as soon as this happens. The market is influenced by various factors, one of which is that Kuwait is a small country with limited land available. There has been more demand for property than the market has to supply.

However, investing in Kuwait could have long-term ties depending on the regulations that are put in place. Research is being conducted by Real Estate Clearing Company, a government initiative. Currently in place is a Build-Operate-Transfer system, whereby private companies operate on government land for 20 years, after which the project is returned to the state.

Property Market in Kuwait 

While property investments require a substantial amount of funds, the market is known to be affordable and attractive to investors. Kuwait’s investment properties are mostly made up of apartments, which are in high demand from expat workers in the city. With this being the case, the market is also very healthy in terms of its very high occupancy rates.

The houses and villas situated near Kuwait’s shoreline are more expensive, as is often the case in the housing market. Apartments are predominantly located near the city, or transport lines like the highway also fetch higher prices.

The most popular residential areas in Kuwait include Salmiya, Hawalli, Salwa, and Jabriya.

As with almost all real estate, it comes down to location, location, location. You’ll need to conduct a thorough search into the different neighborhood options, as some will be better suited to expats, for example. Market research should be done for the area you’re interested in to ensure you’re paying a fair amount.

Based on the way relationships of all kinds are built in the Middle East, finding a property is a search best done through word of mouth. Asking around can be the way to learning about property sales here – the internet does not have many options and is not the best place to conduct your search.

Most expats who move to Kuwait rent a property first and then go about looking for one to purchase. When you find a property you’d like to buy, ensure that you keep a paper trail. This does not only refer to the contract but the purchasing price and conditions as well.

When renting, the landlord can increase the rent by up to 100%. The tenant then has to accept the terms or relocate. Contracts stay in place for five years and are renewed automatically, though there is a nine-month notice period or obtain a court notice to stop the automatic renewal of the lease.

Kuwaiti Real Estate Investments

Land in Kuwait is highly regulated and divided into residential, investment, and commercial categories. The government classifies and reclassifies these, ultimately deciding which areas are open for development. The amount of urbanized land available in Kuwait is this much lower than its neighboring countries in the Middle East.

The real estate sector is continually developed with the support of the Kuwait Investment Authority, the Kuwait Credit Bank, and the Public Authority for Housing Welfare. The bank aims to support citizens in purchasing real estate and industrial and agricultural real estate by providing them with credit. The government also assists by offering housing support to its nationals, based on one’s family status. The state has historically supplied large homes of about 400 square meters per family, which is very large compared to the average space a family has in a home globally.

To meet the needs of the country’s demand for housing, the government put plans in place to develop residential projects to accommodate its growing population.  A primary example of this is Sabah Al Ahmad Sea City, a city created in the Kuwaiti desert. This billion-dollar investment is going to house 250,000 people and will take approximately two more decades to complete. It is being built in 10 phases, complete with a marina for yachts and a retail center. This project, inspired by a wealthy Kuwaiti property developer, will free up the congested city.

Kuwait is known to focus on local and foreign real estate investments. Its most recent venture will be investing millions of dollars in a real estate project in Egypt’s Administrative Capital and El-Alamein. This investment is by a company that is made up of an Egyptian-Kuwaiti partnership. The venture will develop construction and real estate in Egypt and is expected to be complete by 2024. It is called “Modon,” meaning cities, including residencies, a hotel, and skyscrapers.

Wrapping Things Up

In short, Kuwait is a very good market for real estate investors. It is, however, difficult to purchase property if you are not a national or foreigner from the GCC. However, with these regulations set to change in the near future, the country will see more investments made by those who want their share in this growing, steady, and wealthy Middle Eastern nation.