Kuwait has registered a 24 per cent year-on-year growth in its real estate sales which surged to KD315 million ($1.1 billion) in January, said a report.
However, the property sales fell in month-on-month terms, but only after a very strong December, stated the National Bank of Kuwait (NBK) in its review.
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, it added.
On the residential sector, NBK said the sales dropped two per cent y-oy to hit KD142 million in January. 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 (down 32 per cent y/y), the report stated.
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, stated the report.
In terms of location, the Kuwaiti bank said 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 KD2 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 KD141 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 six per cent share.
According to NBK, the sales in the commercial sector dropped six per cent to KD32 million in January, from KD34 million a year earlier.
Nine transactions were recorded in the sector with two of these exceeding KD3 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 KD27 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, stated the top Kuwaiti bank in its review.
The value of disbursed loans increased 45 per cent y/y to KD15.1 million, it added.
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