Kuwait’s real estate market continued to experience subdued activity in the second quarter of 2026, extending a decline that began in the first quarter, although early signs of stabilization have emerged amid easing geopolitical tensions following a temporary US-Iran peace agreement. While overall sales remained weak, residential property transactions showed improvement, partially offsetting weaker investment and commercial sector performance.
Total property sales for April through June reached KD 826 million, marking an 8.2 percent decrease from the previous quarter and a 17.8 percent decline year-on-year. This represented the lowest quarterly sales figure in over two years and a considerable drop from the decade-high of KD 1.3 billion recorded in the final quarter of 2025. The downturn was primarily driven by a sharp contraction in commercial property sales, which nearly halved to KD 112 million—a 47.4 percent reduction quarter-on-quarter, though still slightly ahead of last year’s second quarter by 7.9 percent. Investment property sales also fell for the second consecutive quarter, standing at KD 287 million, down 1.6 percent from the prior quarter and down 40.5 percent compared to the same period last year. This continued weakness underscores the sensitivity of the investment segment to regional geopolitical uncertainty and corresponds with slowing credit growth for real estate-related activities reported by local banks.
By contrast, residential property sales rose to KD 427 million during Q2, increasing by 8.2 percent from the first quarter and 2.0 percent year-on-year, reaching their highest level in three quarters. Transaction volumes also improved, indicating potential strengthening underlying demand despite ongoing geopolitical and economic uncertainties.
Real estate prices showed tentative signs of recovery in the second quarter, rising by 1.0 percent quarter-on-quarter after three consecutive quarters of decline, though prices remained 5.8 percent lower than the previous year. The strongest price gains were observed in residential properties, which increased by 3.8 percent quarter-on-quarter—marking the first quarterly rise since Q2 2025—while still down 10.0 percent year-on-year. This rebound suggests a moderation of the steep price corrections seen over the past year as buyer sentiment improves with the easing of regional tensions. In comparison, investment property prices weakened slightly by 1.8 percent from the preceding quarter and fell 0.9 percent compared to the same quarter in 2025, mirroring softness in investment sales activity.
Despite signs of recovery in the residential market and overall price stabilization, real estate activity’s broader revival is likely to depend on sustained regional stability. The recent increase in tensions between the United States and Iran, which threatens the June ceasefire arrangement, poses risks to market confidence and may hinder a stronger rebound in real estate transactions during the remainder of 2026. Analysts maintain a cautious outlook, emphasizing that a durable recovery will require improvements in investment sector activity linked to geopolitical developments in the Gulf region.