Kuwait to let expats buy property to boost market

Unsplash/Ahmad Mohammed

• Expats could own Kuwaiti real estate for first time under new proposals 
• Volume of private housing transactions fell 34% last year
• There are a reported 320,000 investment apartments in Kuwait

Real estate activity in Kuwait has fallen over the past year, but the government is hoping to turn that around by allowing expats to buy property for the first time. 

A ministerial committee has lodged a proposal to the cabinet to allow non-Kuwaitis to own investment residential properties, according to a local media report this week. 

The proposal is due to be discussed by the new parliament to be formed after Kuwait’s national assembly elections on June 6.

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Parliament is also expected to review a draft mortgage bill that the government hopes will help address muted demand among property buyers spooked by current high interest rates. 

The total volume of real estate transactions in Kuwait declined by 2.8 percent between January and September 2022, according to investment banking and asset management institution Kuwait Financial Centre, known as Markaz. 

Markaz’s real estate market outlook for the first half of 2023, published in March, said the drop was mainly attributed to a 34.6 percent year-on-year drop in transactions in the private housing segment, even though deal activity in commercial and Istithmari (government-funded) residential property grew. 

The report pointed out that the steep decline in private housing sales last year came against a backdrop of a significant uplift in 2021 “driven by pent-up demand after the easing of Covid restrictions, and the current decline could be indicative of subsiding demand”. 

Residential prices and rents grew in most locations in Kuwait over the nine months to September 2022, according to Markaz, helped by strong economic growth from high oil prices, and a post-pandemic recovery in the private sector.  

Nonetheless, the rise in interest rates with the Kuwaiti dinar pegged to the US dollar, and threats of global recession, “pose threats” to the country’s property market in the months ahead, the report added. 

Under the committee’s proposals, expats would be allowed to own one residential apartment each in a designated investment building, provided they are a permanent and legal resident of Kuwait and have had no civil or criminal court cases filed against them, according to Kuwait Times.

The apartment could not exceed 350 square metres in area. 

There are an estimated 13,000 investment buildings in Kuwait containing a total of 320,000 apartments, many of which are subject to bank mortgages, the newspaper added.

Allowing expats to own them would create fresh liquidity into real estate finance and boost the local economy, it said.