Sales overviewThe latest NBK Real Estate Brief stated: Real estate activity roared back to life in March, providing the first sign that recovery in the sector may be stepping up a gear. The total number of registered property sales (residential, commercial and investment) almost doubled to 760 in March, up from 383 in February and 97% higher than a year ago. This was the strongest performance in two years, putting volumes back at pre-crisis levels. We know that these sales data can be volatile from month-to-month so we are a bit cautious. Nonetheless, the March data suggest that there may be scope for activity to surprise on the upside, helped by improving confidence and stronger demand for land, especially as the government pushes on with its economic development plans. Note that all three market segments recorded significant gains in sales in March. Though by virtue of its large size, the biggest contribution came from the residential sector. In KD value terms, sales also registered their highest level for nearly two years, reaching KD 206 million in March, up 107% on February. The year-on-year increase jumped from negative territory to 130%, helped by a base effect following very weak sales a year ago. i) Sales – residential (mostly villas and land)Residential sales more than doubled to 598 in March, from 255 in February. This was the highest level for two years and well above the average of 464 per month seen over the past five years. Alongside strong volumes, the average value of residential transactions, at KD 237,000, rose to its second highest level ever, a decent recovery after the sharp drop seen through 2009. The detailed weekly data suggests that a large number of relatively high value land sales at the Khairan Pearl development area in southern Kuwait contributed to high averages in March. ii) Sales – investment (mostly apartments)The investment segment also enjoyed a decent March, though its improvement was less pronounced than that in other sectors. The number of investment sales rose to 154 from 124 in February. This is well above the average of 100 per month seen through 2009. The year-on-year improvement, at 29%, is below that of the residential sector. But this partly reflects the fact that investment sector sales held up relatively well during the crisis, and are therefore due a less spectacular recovery. Average transaction values, at KD 322,000, have fallen back over the past two months, but are still up considerably (+47%) on their weak levels of a year ago.iii) Sales - commercialThere were eight commercial property transactions during March, up from four in February. Despite this rise, the commercial sector is the segment where it is most difficult to spot any material improvement in underlying conditions. While the number of transactions was up in March, they were not of especially large value - averaging KD 1.8 million each, well below the average of KD 3.1 million per transaction in 2009. This sector’s relatively weak performance may signal a combination of difficult access to finance and perhaps uncertainty over the outlook for commercial property prices. Savings and Credit Bank loansThe NBK report concluded: The number of loans approved by the Savings and Credit Bank (SCB) rose 13% between February and March to 309. This is still below the monthly average of 371 seen through 2009. Within this total, the number of loans approved for new construction remains at low levels – down to 60, or -76% on a year ago. This is despite hopes that acceleration in the government’s land distribution program would stimulate lending. By contrast, the number of approvals for loans for maintenance & additions purposes remains at historically strong levels, despite being broadly flat at 157 in March. It is worth noting that at KD 11 to 13 million over the past few months; the value of disbursed loans – driven by payouts linked to various stages of construction – has been KD 3 to 4 million per month above the level of approvals. The disbursal process in effect is steadier than the more volatile approvals.