The Kuwait Financial Centre (Markaz) has released its report titled “Real Estate Market Outlook: First Half 2026,” reviewing the performance of markets in Kuwait, Saudi Arabia, and the UAE during the second half of 2025, along with a forward-looking perspective for the upcoming period.
Gulf Overview
The report noted that Gulf real estate markets recorded strong momentum in the second half of 2025, supported by economic growth, easing monetary policy, and an improved interest rate environment.
This acceleration is expected to continue into the first half of 2026, driven by higher oil production, expansion in non-oil sectors, and increased government spending. These factors are enhancing liquidity, credit availability, and demand for residential, commercial, and industrial real estate.
Kuwait: Stability and Selective Growth
The Kuwaiti market maintained stable growth throughout 2025, with rising land prices and rents. Real estate sales jumped 26.9% to reach 3.04 billion dinars, supported by a 60% increase in the investment sector.
GDP is projected to grow by 3.9% in 2026, reinforcing demand, particularly in the commercial and industrial segments. The report expects continued stability, with gradual increases in prices and rental rates.
Saudi Arabia: Sustained Momentum
The real estate sector in Saudi Arabia continued to accelerate, backed by a strong housing market and a shortage of office supply in Riyadh, where vacancy rates stand at just 0.5%.
Residential unit transactions rose 17.9% in the third quarter of 2025, alongside notable rental growth. Momentum is expected to persist in 2026, supported by capital spending under Saudi Vision 2030 and ongoing population growth.
UAE: Strong Performance Approaching a Peak
The United Arab Emirates delivered a strong performance in 2025, with the value of transactions in Dubai rising 28.3% to AED 554 billion, while sales in Abu Dhabi increased by 75.8%.
Dubai also maintained attractive rental yields of 7.47%. Despite these strong fundamentals, the report anticipates that the market may reach its peak during the first half of 2026, followed by the possibility of moderate slowing later on.
The report concludes that Gulf real estate markets are likely to maintain their momentum through the first half of 2026, with the sector continuing to play a major role in economic growth and offering promising investment opportunities across various segments.
