Kuwait real estate sales edge up in June

04/08/2015 15:24 AST

Sales across Kuwait’s three main real estate sectors totalled KD270 million ($890 million), up 5.4 per cent from May, while the number of transactions was up 2.9 per cent, a report said.

June’s performance improved despite the seasonality effect of the summer break and the holy month of Ramadan; these factors are likely to weight on the coming months, explained the latest Economic Update from the National Bank of Kuwait (NBK).

Despite the monthly improvement, total sales continued to confirm the decline in activity compared to a year ago with June sales recording a 48 per cent drop compared to the same month last year.

Sales in the residential sector were relatively unchanged from May, totalling KD120 million in June. The sector registered a 6 per cent m/m increase in the number of transactions. The average transaction size in June slid slightly to KD341,000, down 4.6 per cent month-on-month (m/m) but remains 2 per cent higher than 2014 average transaction size of KD334,000.

According to NBK, activity was heaviest in the Ahmadi governorate accounting for 33 per cent of all residential transactions. Mubarak Al-Kabeer governorate came in second, accounting for 25 per cent of transactions. Vacant plots constituted 48 per cent of all transactions in the sector. Residential sector sales during the first half of 2015 recorded a 20 per cent drop so far compared to the same period last year.

The investment sector also picked up in June, the Update said.

Total sales in May reached KD124 million, a 7.6 per cent m/m increase. However, the number of transactions declined by 5 per cent m/m during the month. Apartments accounted for 57 per cent of all transactions while whole buildings constituted 33 per cent of all transactions. The Ahmadi governorate once again witnessed the bulk of activity, with 61 per cent of all transactions. The largest transaction, on the other hand, took place in Hawalli for a plot sold at KD 13.5 million. Year-to-date, the sector recorded a 28 per cent decline in sales.

Sales in the commercial sector increased in June and continue to show resilience compared to last year. Sales of commercial properties reached KD 26 million in June, up 16 per cent m/m as it registered six transactions. The sector’s biggest transaction was for a complex in Hawalli, sold at KD8.3 million. The sector is known for its lumpy and volatile sales.

However, sales thus far in 2015 through June were down 29 per cent compared to the same period last year.

Kuwait Credit Bank (KCB) approved KD 18.8 million loans in June. The value of approved loans during the month was down 41 per cent year on year, while disbursed loans were up slightly by 7 per cent y/y totalling KD 21 million.

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