Sales overviewThe latest NBK Real Estate Brief stated: Real estate activity enjoyed another strong month in April, following the sharp upward move seen in March. The total number of registered property sales (residential, commercial and investment) registered at the Ministry of Justice stood at 744. This is 2% lower than a month earlier, but broadly double the number recorded in February and the average for 2009. A closer inspection of the data, however, reveals that a large chunk of the transactions – close to half – came from sales of plots of residential land, rather than buildings. Such land sales can be very erratic, making conclusions about the broader state of the market difficult to draw. Excluding residential land sales, the number of transactions would have been much lower at around 400. At these levels, the recovery in real estate activity looks less impressive, though activity has undoubtedly improved from last year. In KD value terms, the picture was less striking, with sales falling to KD177 million, down 14% from March and lower than the previous high recorded last November. Nevertheless, this was still much higher than the average values recorded in 2008 and 2009. We estimate that the residential land sales mentioned above contributed around KD50 million to sales in April, again, somewhat flattering the picture.i) Sales – residential (mostly villas and land)Total residential sales stood at 558 in April. This was down 7% from the very strong March figure, but otherwise the highest level of sales for more than two years. As highlighted above, residential sales were given a huge boost by some 344 land sales in April, of which more than half came from the Khairan Pearl development area. Some of these appear to be ‘block’ transactions, possibly generated by a few individuals with multiple holdings. More generally, rising lands sales could reflect growing confidence that public infrastructure development in certain areas is moving ahead, making land holdings in nearby areas more attractive. It was notable that the average value of each residential sale was low at KD 175,000, probably reflecting the high proportion of land sales (as opposed to land plus building).ii) Sales – investment (mostly apartments)The investment segment enjoyed its highest number of sales since November 2008, at 168. This is close to the strongest performance ever recorded – 175 at the height of the property boom in mid-2007. In value terms, however, sales are well off their historic highs, which peaked in 2007. The implied fall in average transaction values reflects falls in apartment prices over the past two years, and perhaps a relatively large proportion of less expensive multiple apartment blocks being bought now.iii) Sales - commercialCommercial property enjoyed a better month than of late, though the picture remains mixed. There were 18 commercial transactions, up from 8 in March and an average of 6 per month last year. Once again, however, the headline figure was boosted by land sales in the Khairan Pearl development, which accounted for around half of the total number of sales. Moreover, the transactions were of small size (the Pearl plots were each fairly small), so in value terms sales amounted to a relatively modest KD 10 million, down from an average of KD16 million per month in 2009. Savings and Credit Bank loansThe NBK report concluded: The number of loans approved by the Savings and Credit Bank (SCB) rose 12% between March and April to 345. This is 25% below its level a year earlier, and somewhat below its historic trend of 400-450. In value terms, approvals rose by a similar 13% from their March levels, but remain some 43% lower than a year earlier.As for most of the past year, the current weakness stems mostly from low approvals for loans for the construction of new homes, which, at 53, remains stuck at historic lows. Between 2001 and 2008, the monthly average was 203 such approvals. By contrast, loans for maintenance and additions continue to run at historic highs, reaching 180 in April compared to an average of 97 per month between 2001 and 2008. The relative under-performance of the former loan segment may be being affected by the continued sluggishness of the government’s housing distribution program, to which SCB new construction loans are usually linked.