Kuwait April property sales hit record
Kuwait, June 7, 2012
Kuwait's real estate sales activity in April totaled KD412 million ($1.470 billion), the highest since July 2007, and second all-time best.
The strong month was mainly due to a 93 per cent jump in investment sales (month-on-month), but was also supported by a healthy residential sector, said a National Bank of Kuwait report.
Residential sector sales totaled KD206.4 million in April, down 11 per cent y/y. The drop was due to a basis effect —April 2011 had seen a huge jump (+139 per cent), and so in comparison April 2012 seems low, despite strong sales. In 2011 for example, the monthly average in that sector was KD121 million.
In fact, the number of residential transactions reached an all-time high at 1,086 transactions. Plot sales were 72 per cent of these transactions, while 28 per cent went to buying homes. This is in line with the recent trend, where the majority of transactions go into buying plots.
Furthermore, about two-thirds of all transactions took place in Ahmadi governorate, which is the most common location of residential purchases. Overall, the residential sector continues to be in good shape and remains driven by robust local demand.
The investment sector saw KD180.4 million in sales during April, up KD71 million (up 65 per cent y/y). The big jump came from an increased number of transactions (up 69 per cent y/y), while the average transaction size was almost unchanged (down 2 per cent). This indicates a healthy appetite for this sector, as it continues to drive, along with the residential segment, the real estate sector in Kuwait. In addition, 73 per cent of these purchases were for buildings or apartments (intended for rent), while 12 per cent went into buying plots of land, with the remainder going into buying offices and shops.
The commercial sector recorded KD25.4 million in sales, distributed over seven transactions. This is compared to KD49.5 million in April 2011. These transactions were split between the purchase of three buildings, three plots, and one commercial complex –with buildings and plots bringing in about 92 per cent of the sales, split almost equally. The 3-month average of commercial sales has been between KD10-15 million so far this year.
The Savings and Credit Bank (SCB) approved 382 housing loans, totaling KD17.6 million in value, which is a KD11.3 million increase from April of last year. Additionally, the SCB disbured KD13.6 million in housing loans, half of which will go into buying new houses, with the remainder going into the purchase of existing houses or into additions and rennovations. Both the total value and number of approved loans has seen risen considerably in 2012, indicating a healthy residential sector on the demand side.
Overall, April saw strong sales in both the residential and investment sectors. This trend should continue for the year, with some expected seasonal softness in summer, said the report. - TradeArabia News Service