One of the most expected reforms of 2025 is a new mortgage law, now under discussion between government ministries, banks and the Kuwait central bank (CBK). If it is approved, the legislation, which has been under discussion for years, would allow commercial lenders to issue housing loans; Currently, only the Kuwait credit bank belonging to the state can do so.
“This changes the game for banks in Kuwait,” explains Ahmed al-Duwaisan, interim CEO and director general of business banking services at the Al Ahli bank in Kuwait. “Once the law is mortgaged, this would help retail trade considerably. This is a new avenue for conventional banks like us. »»
According to local media, the new law would allow commercial banks to lend up to $ 750,000 over a duration of up to 25 or 30 years; The current ceiling is 15 years. The required debt / income ratio should also increase, which gives borrowers more flexibility.
With more than 100,000 home housing applications pending, demand is immense, but also a significant growth opportunity for the Kuwait banking sector.
“While government discussions on mortgages increase again,” said Abdullah Al-Tuwaijri, CEO of consumer, private and digital banking from Boubyan Bank, “we believe that there will be an opportunity for all banks to help solve the housing problem in Kuwait, which will in turn lead to additional potential growth opportunities.”
The proposed reforms should also have an impact on real estate investment.
“Reforms such as the proposed mortgage law and the recently implemented laws to prevent land monopoly will support local real estate, which is an important asset class for investors,” explains Ali Khalil, CEO of Markaz, a Kuwaitian bank management and investment bank. The emirate real estate market has already shown impressive growth, because sales have increased by 36% in annual sliding in 2024. And housing should be a key engine of the ambitious suite of megaprojects of $ 121 billion from the government, further feeding the expansion of the sector.