Kuwait real estate sales soar to $1.24bn
Kuwait, May 12, 2014
Kuwait has registered a 20 per cent year-on-year growth in its real estate sales in March which surged to KD351 million ($1.24 billion) compared to last year, said a report.
The March monthly sales are the highest this year, closing the first quarter with sales totaling KD923 million. Sales were up across all sectors with an exceptional performance by the commercial sector, according to National Bank of Kuwait (NBK).
The residential and investment sectors remained solid, and the real estate sector was expected to have another strong year. The sales in the residential sector reached KD177 million in March, posting a 19 per cent year-on-year increase.
Although there was a 10 per cent y/y decline in the number of transactions to 439, this was more than offset by a rise in the average transaction value. The latter increased 32 per cent y/y to KD403,000, stated the NBK report.
The top Kuwaiti lender pointed out that despite strong year-on-year increases in sales, the number of transactions had been dropping (year-on-year) in past months - a possible reflection of the short supply of residential properties available on the market.
In terms of location, 34 per cent of transactions were in Al-Ahmadi governorate, followed by Mubarak Al-Kabeer with 25 per cent of transactions. Sales of land plots – as opposed to finished buildings – accounted for 57 per cent of all residential transactions in March.
Quarterly, Al-Ahmadi also led the governorates with 33 per cent of all transactions in the first quarter followed by Mubarak Al-Kabeer, which has been seeing increased activity in the Abu Fateera and Funaitees areas.
NBK said the sales in the investment sector stood at KD132 million in March, up nine per cent y/y. The sector also saw a 53 per cent y/y increase in the number of transactions, recording 195 transactions by the end of March.
The increases reflected on the average size of transaction which dropped 29 per cent y/y, to KD680,000. In quarter analysis, the investment sector sales grew 35 per cent compared to Q1 of 2013.
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 32 per cent of transactions, followed by plots with an 11 per cent share.
Sales in the commercial sector soared 92 per cent to KD 42 million in March, from KD 22 million a year earlier, said the report.
The sector recorded 12 transactions, with one plot in Jahra selling for KD11 million. Sales in this sector are often uneven month-to-month, the NBK stated.
While the sector’s performance in the first two months of 2014 seemed to be cooling, March sales confirmed a strong bounce back.
March also witnessed two significant transactions classified by the Ministry of Justice as ‘coastal line’ properties. The first is a 4,000 sq m residential plot in Messila sold for KD9 million, while the second was a 3,700m2 commercial ‘shops’ transaction in Mahbola, for KD7 million, the report added.-TradeArabia News Service