Notwithstanding the setback witnessed in the early half of 2011 owing to the prevailing global economic conditions, political crisis in the nation and regional civil unrests, growth in the Kuwait’s construction sector continues to gather pace backed by its strong economic growth. The major driver behind rapid expansion of construction industry has been government spending, which registered noteworthy increase in the recent years. Its young and quickly growing population base and the Sultanate’s economic diversification programme are the key driving forces behind the construction sector developments.
Kuwait’s real estate market is a pillar of strength for the local economy, as its health is tied to the Kuwaiti population as a whole. Aside from Oil sector, Kuwait has two major markets that are stock exchange and real estate. Notwithstanding the setbacks witnessed as a consequence of the global economic downturn and political crisis, the country’s building and construction sector still holds potential and the market is slowly beginning to recover from the impact of the turbulent economic times. The real estate sector and related sectors have been contributing more than seven percent to the gross domestic product (GDP) over the past decade. Legal restrictions introduced post 2008 in terms of laws prohibiting mortgaging and trading of residential property in addition to the global economic slowdown had caused a dent in the growth curve with the market experiencing a near one-third contraction in 2008 and the following year. Nevertheless, the future for this market remains excellently positioned for recovery and growth with the Government plans for addressing the demands for low cost housing projects in tandem with private sector investors and introducing measures to ease the stringent project financing policies.
Stability of oil prices, high income, low inflation and low prices of construction materials, and attempts by real estate companies to address consequences of global financial crisis have contributed to a healthy boost for the real estate sector in Kuwait. Heavy government investment in building social infrastructure is also expected to drive the sector. The government's projected spending of KD 37 billion during the 2010 - 2014 within the development plan is expected to boost real estate, coupled with housing facilities offered by banks.
Ventures Middle East with its vast experience on up to date tracking of projects across industries and countries in the Middle East has aimed to explore the main areas of growth in the Kuwait building construction market and the prime forces driving the growth of this market while trying to enumerate and outline the main restraints to the growth over the coming years. The Ventures Kuwait - Building Construction Industry Overview 2011, analyzes all the sub-sectors within the building construction industry such as retail, commercial, residential, mixed use, tourism and leisure and others (includes educational institutions, hospitals, airports and other miscellaneous projects) in detail as to their growth and prospects in the current economic scenario and their future up to 2013. Key highlights of the study include a probability impact matrix of the drivers and restraints to the growth of the building construction industry, besides providing detailed and vital statistics on the contracts awarded across the building construction market that comprise the largest areas of activity in the industry, namely, residential, commercial, mixed use, retail, tourism and leisure and others and the demand forecast for key real estate segments. It also includes statistics on the top projects in these major sectors and an overview of the main political, social, economic, technological, legal and environmental factors shaping the growth of the industry in the Sultanate of Kuwait. This study provides a comprehensive understanding of the complete market dynamics of the Kuwait Building Construction Industry to assist players interested in assessing the market opportunities in this resilient yet dynamic market.
