Kuwaiti real estate market gives mixed messages
The sales activity in the Kuwait real estate market was flat year-on-year for August totaling KD120 million ($426 million) even as the residential sector continued to put up a strong show, according to a report.
The country's residential sector sales hit KD77.8 million in August, up KD21 million y/y on the back of a high average transaction size, National Bank of Kuwait (NBK) said in its report.
This segment of the real estate market has continued to perform well, as it faces robust demand, it added.
However, the investment sector saw some slowdown, said the top Kuwaiti lender in its monthly review.
The investment sector saw KD35.6 million in sales during August, its lowest in a two-year period. "This was due to a low number of buildings – which make up the bulk of investment sales – being sold, while other types of smaller transactions (single apartments, plots of land, etc) saw regular sales activity," said the NBK report.
The commercial sector recorded KD6.7 million in sales, a relative improvement y/y, but still lower than average monthly sales so far in 2012 - which is already lower than that of 2011.
Nonetheless, this segment is more volatile than others, witnessing only a handful of transactions any given month. August saw three such transactions, averaging about KD2.2 million each, the report added.
According to NBK, the Savings and Credit Bank (SCB) approved 149 housing loans, totaling KD7.2 million, down 26 per cent y/y in value.
The loans split somewhat evenly between the three broad categories (new constructions, existing homes, and additions and renovations.). This is slightly different from trend, where most loans usually go into financing new constructions, it added.
The Kuwaiti lender pointed out that August was expectedly a somewhat slower month for real estate sales thanks to Ramadan and fewer working days due to Eid.
Overall, the real estate sector seems in good shape, considering some expected softness due to summer and Ramadan, the bank said in its conclusion.