Kuwait’s Real Estate Market Outlook for H1 2024
Kuwait is expected to see a stable real estate market in the first half of 2024, supported by several positive factors.
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The economy is forecasted to grow at a rate of 3.6% annually, a significant improvement from a contraction of 0.6% in 2023. This growth is mainly driven by the anticipated expansion of the non-oil sector by 3.5%, alongside stable interest rates and increased activity in projects. The IMF predicts oil prices to average at USD 79.92 per barrel in 2024, contributing to price stability. This is further supported by Kuwait’s ongoing voluntary reduction in oil production.
In the second half of 2023, Kuwait observed relatively stable inflation, helped by the reduction in domestic food prices and a decrease in global food costs. Housing rents experienced a 3.4% increase over the year, while the growth in private sector credit notably slowed from 9.1% to 2.5% year-on-year as of October 2023.
The first half of 2024 might see a boost in credit growth, helped by expected peaks in interest rates, continuous project activities, and further employment opportunities for Kuwaiti citizens, although high interest rates and continued cuts in oil production could pose challenges.
Despite a downturn in residential sales, transaction volumes, and activities in segments like the Istithmari and commercial sectors during the first three quarters of 2023, the overall real estate market remained stable. Prices and rents were consistent, and there was a gradual normalization of demand post-pandemic.
After considering all the economic indicators, reports are showing that there is optimism for the stability and potential increase in activity within Kuwait’s real estate sector throughout 2024, especially towards the latter part.
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Villa prices saw particularly strong growth, with capital values increasing by 33.4 percent year-on-year
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Dubai’s real estate market showed strong performance in the second quarter of 2024, with notable increases across the residential, office, and retail sectors, according to a new ValuStrat real estate report for Q2 2024.
Villa prices experienced particularly strong growth, with capital values rising by 33.4 percent year-on-year.
Haider Tuaima, Director and Head of Real Estate Research at ValuStrat said: “The Dubai real estate market has shown impressive growth and resilience in recent months. The ValuStrat Price Index for Residential Capital Values increased by 6.4 percent quarterly and 28.2 percent annually, reaching 178.2 points.
“Despite severe flooding caused by record rainfalls in April, the quick and effective response from developers and authorities helped to control the damage, ensuring that market activity and property valuations remained robust in the subsequent months.”
The office sector also performed well, with the VPI for office capital values surging by 31.7 percent annually and 9.4 percent quarterly, reaching 212.5 points—the highest quarterly increase in a decade.
In the retail sector, Emaar Properties reported 98 percent occupancy in their prime mall assets, while overall mall occupancy stood at 96 percent during the first quarter of 2024. The hospitality sector also saw growth, with total international guests reaching 8.12 million as of May 2024, a 9.9 percent increase compared to the same period last year. Hotel occupancy reached 81 percent, rising by 1.4 percent year-on-year.
Despite these positive indicators, Tuaima added, “The decline in transaction volumes calls for a closer examination of market dynamics as stakeholders navigate this evolving landscape.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
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