Kuwait: Investment sector continues to lead real estate sales
Real estate data for Kuwait in January show sales rising by 24 per cent y/y to KWD 315 million. In its latest Economic Updated, NBK said sales fell in m/m terms, but only after a very strong December. A strong performance from the investment (i.e. apartment/buildings) sector boosted the market for a third month in a row, while sales in other sectors moderated slightly.
Sales in the residential sector reached KWD 142 million in January, a 2 per cent y/y drop. This decline came despite a continued surge in average transaction values (+46 per cent y/y), which was effectively offset by a decline in the number of transactions (-32 per cent y/y). January registered 368 residential transactions, the lowest since February 2013. Furthermore, the number of transactions has now declined for four months in a row in y/y terms. Given rising average transaction values, however, it is too soon to associate this with a drop in demand.
In terms of location, a third of transactions were in Ahmadi governorate, mostly in the Sabah Al-Ahmed Sea-City. Another third went to Mubarak Al-Kabeer governorate, which saw three coastal residential transactions valued at KWD 2 million each. Sales of land plots – as opposed to finished buildings – accounted for 60 per cent of all residential transactions in January, down from recent highs.
Sales in the investment sector increased to KWD 141 million in January, up 88 per cent y/y. Sales in the investment sector have continued to drive the real estate market for the past three months. The number of transactions stood at 197, an increase of 76 per cent y/y. The sector has long been viewed as a strong alternative to the stock market for investing.
Individual apartments made up more than half of all transactions in the investment sector – the majority in Mahbola. Whole buildings came in second, accounting for 38 per cent of transactions, followed by plots with a 6 per cent share.
Sales in the commercial sector dropped 6 per cent to KWD 32 million in January, from KWD 34 million a year earlier. Nine transactions were recorded in the sector with two of these exceeding KWD 3 million. Sales in this sector are particularly uneven, and while 2013 was an exceptional year for the sector, part of this may have come from purchases by government-held portfolios.
Away from sales, Kuwait Credit Bank (formerly the Savings and Credit Bank) approved KWD 27 million in loans in January, slightly down on the month but still up 79 per cent y/y. This is the first time the value has dropped below the 30 million mark since February 2013. The past year has nevertheless been a very active year for the bank, perhaps linked to an increased pace of land distributions by the government. The value of disbursed loans increased 45 per cent y/y to KWD 15.1 million.
- Fleeing war? UAE is the safe haven: Dubai property market is safe and secure according to a top banker
- CEO of the UAE's top developer, MAF Properties talks money and retail
- The top five mistakes committed by real estate agents
- After bringing down Dubai's Finanicial Market by $30 billion, what does Arabtec's downfall really tell us?
- Gaza's desperate need for a 'Marshall Plan'
- Kuwait real estate sales top one billion in January
- Investment sector continues to lead Kuwaiti real estate sales
- Kuwait real estate sales soaring, and in billions
- High Demand, High Liquidity: Kuwait's real estate sales reach $1.1 Billion in June
- Real estate sales volume in Kuwait dipping 33% during 2008