One of the most anticipated reforms of 2025 is a new mortgage law, now under discussion between government ministries, banks, and the Central Bank of Kuwait (CBK). If approved, the legislation, which has been under discussion for years, would allow commercial lenders to issue housing loans; currently, only the state-owned Kuwait Credit Bank may do so.
“That’s a game changer for banks in Kuwait,” says Ahmed Al-Duwaisan, acting CEO and managing director of Corporate Banking at Al Ahli Bank of Kuwait. “Once the mortgage law comes out, it would help the retail business significantly. That’s a new avenue for conventional banks like us.”
According to local media reports, the new law would allow commercial banks to lend up to $750,000 over a term of up to 25 or 30 years; the current cap is 15 years. The required debt-to-income ratio is also expected to increase, giving borrowers more flexibility.
With over 100,000 pending home-loan applications, demand is immense, but also a significant growth opportunity for Kuwait’s banking industry.
“As government discussions on mortgages ramp up again,” says Abdullah Al-Tuwaijri, CEO of Consumer, Private & Digital Banking at Boubyan Bank, “we believe there to be an opportunity for all banks to contribute to solving the housing problem in Kuwait, which in turn will lead to additional potential growth opportunities.”
The proposed reforms are also expected to impact 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,” says Ali Khalil, CEO of Markaz, a Kuwaiti asset management and investment bank. The emirate’s real estate market has already shown impressive growth, as sales increased 36% year-over-year in 2024. And housing is expected to be a key driver in the government’s ambitious $121 billion suite of megaprojects, further fueling the sector’s expansion.
