Kuwait’s investment property sector continued to lead real estate activity in the first half of 2026. The sector was supported by regulatory reforms introduced by the government, which helped redirect capital toward investment properties, regarded as the most stable segment and the best positioned to deliver sustainable operating returns, said a report by Kuwait International Bank (KIB).

The report highlighted that the real estate market has recently undergone significant changes following government measures aimed at regulating the residential and industrial sectors.

These measures have prompted a broad segment of investors to focus on investment properties, amid rising demand for income-generating real estate assets and continued improvement in rental rates across several investment areas.

As per the report, the recent decisions by Kuwait Municipality have helped enhance the quality of the investment property sector through more effective regulatory requirements.

These include the provision of parking spaces, improved services and compliance with modern planning standards, all of which strengthen the quality of real estate assets and increase their long-term value, it stated.

Fahad Al Mansour, Senior Real Estate Analyst at KIB, said that transactions in the investment property sector amounted to KD574.2 million across 655 deals in the first half of 2026, compared with KD828.1 million across 687 deals during the same period in 2025.

These figures, he stated, should be viewed in the context of the conditions prevailing across the region during the first half of the year.

Markets were affected by heightened uncertainty stemming from geopolitical developments, prompting some investors to postpone major transactions and weighing on the overall value of real estate trading.

The decline does not reflect a weakening of the investment property sector, but was primarily driven by the lower value of completed transactions. Overall real estate activity remained at healthy levels, as reflected in the figures, with the number of deals declining by only 4.7% compared with the same period last year, while the decline was concentrated in higher-value transactions.

The completion of 655 transactions within six months, despite regional challenges, reflects the sector’s resilience and continued investor confidence. It also underscores sustained underlying demand for investment properties, which remain among the most stable segments of the real estate market, it added.-TradeArabia News Service