The sales in Kuwait’s real estate market were down in January for the second consecutive month hitting KD312 million ($1.04 billion) on slower residential and investment sector activity, said a report.

Compared to the same month last year, however, sales were up slightly, by two per cent year-on-year (y/y), stated the country's top lender National Bank of Kuwait (NBK) in its report.

The commercial sector continued its steady growth as demand for retail space increases according to market talk. In contrast, the residential and investment sectors remained sluggish for the month, the latter likely a reflection of subdued investor sentiment in the context of the current environment of low oil prices.

January sales in the residential sector totalled KD146 million ($489 million), up nine per cent y/y. A total of 389 residential transactions were recorded during the month - the lowest since February 2014.

NBK said the activity was once again heaviest in the Ahmadi governorate, which accounted for 38 per cent of all residential transactions during the month.

This, however, is a significant drop from August 2014 when Ahmadi accounted for a substantial 71 per cent of all transactions. Moreover, the average transaction size in January was KD376,000 ($1.26 million), up five per cent month-on-month (m/m), which could be because some lower-priced units from Sabah Al-Ahmed Sea City are now out of the picture.

Meanwhile, sales in the investment sector totalled KD122 million ($409 million) in January, thus registering a drop of 13 per cent y/y. The sector has been going through slight correction of late, with investors concerned that high prices are putting pressure on investment returns, said the NBK in its report.

In terms of the number of transactions, 94 were recorded during the month, the lowest since October 2013. The average transaction size was KD1.3 million ($436,183), supported by a single transaction worth KD22 million ($74 million) in the Capital governorate.

According to NBK, the sales of commercial properties increased by 38 per cent y/y to hit KD44.3 million ($148.6 million) in January.

The commercial sector witnessed three large transactions worth over KD25 million ($83.8 million) in total in the Farwaniya governorate, said the top lender.

Nine transactions in total were recorded in January. The commercial sector was the only sector to record month-on-month gains in January, increasing by 15 per cent over December 2014. The sector’s improving performance in recent months is believed to be supported by a large demand for retail space in the country, it added.-TradeArabia News Service