Kuwait property trading dragged down by land fee and war

Kuwait’s real estate market slowed in the first half of the year, with the value of property deals down 13 percent year on year to KD1.63 billion ($5.3 billion).

Prices fell after the finance ministry introduced an annual fee on March 1 of KD10 per square metre on undeveloped private residential plots larger than 1,500 square metres, aiming to encourage owners to release underused land, according to Alhisba real estate company, which tracks the sector.

“The first half of 2026 witnessed a number of technical changes and regional geopolitical developments, including the enforcement of the vacant land monopoly fee, which contributed to changes in market activity and led to relative decreases in land prices in some areas,” the report said.

While the total value of deals fell 13 percent year on year in the first six months of 2026, the report found the number of transactions rose 1 percent to 2,398.

Investment real estate deals were hit hardest, falling by about a third to around KD532 million in the first half of 2026.

The decline followed a surge in 2025, when trading climbed 27 percent to a record KD4.4 billion across more than 6,000 deals, the Kuwait International Bank said early this year.

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That strong performance came after a government decision in February last year to ease restrictions on foreign ownership of property.

The law allowed entities licensed by the Kuwait Direct Investment Promotion Authority (KDIPA), companies listed on the Kuwaiti stock exchange, and licensed real estate funds and investment companies to own property in the country for operations or employee housing.

Analysts said the law marked a significant change in the Kuwaiti property market, where ownership had historically been restricted to citizens, nationals from other GCC member states and diplomatic entities.