Investor Guide · Kuwait
Investing in Dubai from Kuwait
Why Kuwait invests in Dubai
Dubai’s property market has consistently maintained its appeal as a highly sought-after investment destination for Kuwaiti investors, and transaction volumes look set to rise in the foreseeable future.
Over the course of the past two decades, Kuwaiti investors have recognised the immense growth opportunities offered by Dubai’s real estate sector, prompting them to make substantial investments - in fact by 2020 it was estimated USD 2.3 billion worth of Dubai real estate assets were already owned by Kuwait investors.
Now, the rate of Kuwaiti investment could increase further, following the divergent paths of the two Gulf states' economic and property investment trajectories.
It has not been long since Kuwaiti property investors saw the volume of private housing transactions in their country fall 34% on an annual basis, but as we head into 2025, the market is not set for an immediate uptick.
Imad Haidar, the head of the Real Estate Brokers Association, recently highlighted the challenges facing Kuwait's residential real estate market. He outlined the notable slowdown in demand that began at the start of last year and attributed this decline to several key factors, including rising interest rates on deposits, peak residential property prices, and the implementation of new regulations that have psychologically impacted market participants.
Kuwait's residential real estate market has experienced an average decline of 25% since the beginning of 2023. The most significant drops have occurred in more speculative outer locations. Investors have seen declines vary by region, with some areas experiencing reductions of 20%, while others saw decreases of up to 30%.
What to know before investing
In contrast, inner regions have remained more stable, with some locations even witnessing price increases due to a mismatch between high liquidity and declining demand.
One notable trend has been the influence of bank interest rates on investment decisions in Kuwait. Capital tends to flow into real estate when rates hover between 2 and 2.5%. However, if rates exceed 3%, investors are more likely to favour savings - of course, global interest rates have risen for much of the past three years.
Future price expectations and legislative impact in Kuwait residential investment
If laws are enacted concerning land monopolies or increased utility tariffs for secondary residences, there maybe a potential shift in investment focus from residential properties to other opportunities.
In stark contrast to the Kuwaiti uncertainty, Dubai has enjoyed a stellar few years of investment returns.
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