Kuwait property sales in Aug hit 5-year high
Kuwait, September 26, 2013
Real estate sales in August rose by a strong 86 per cent year-on-year (y/y) to KD223 million ($786 million), marking the highest increase in five years, a report said.
However, compared to July, August sales were down 48 per cent, noted the latest Economic Update released by the National Bank of Kuwait (NBK).
The month-on-month (m/m) drop is attributed to the fact July saw five weeks’ worth of data, along with August hosting of the Eid Holiday and increased number of travellers who postponed their annual leave until after Eid, said the report.
Sales in the residential sector reached KD104.8 million in August, a 35 per cent y/y increase. Growing demand has helped this sector maintain y/y growth, according to NBK.
However, August witnessed an increased number of smaller size transactions; plots (rather than buildings) made up 73 per cent of all residential transactions. The average transaction size was KD201,000, a 12.4 per cent decrease y/y.
Investment sector sales totaled KD54.8 million in August, up 54 per cent y/y. The average transaction was KD772,000 and the total number of transactions in August was off 5 per cent y/y.
Apartments made up almost half of all transactions in this sector, continuing a recent upward trend. Overall, interest and volumes remain sustained in that sector with 3-month average sales of nearly KD120 million.
Commercial sector sales reached KD64 million in August, their highest level so far this year. Also, the commercial sector was the only one to record an increase in m/m sales. Sales were almost 10 times the level of August 2012, on the back of one large transaction. There were only six transactions in the month with one in Kuwait City valued at KD50 million.
The Savings and Credit Bank approved KD 36.5 million in loans during August, while disbursing KD9.9 million. The value of disbursed loans dropped 15 per cent m/m, likely affected by the Eid holiday.
Also, similar to recent trends, about two-thirds of approved loans were for new constructions, while loans for the purchase of existing structures were 7 per cent of total. Since the third quarter of 2012, loan approvals have been shifting towards new constructions. It remains to be seen if this is part of a new longer-term trend in Kuwait’s housing sector, the NBK report said. – TradeArabia News Service
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