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Kuwait residential market posts solid growth in May

KUWAIT, June 28, 2016

The activity in the residential market in Kuwait picked up in May following a lull during the previous month with the sector netting a sales of KD112.8 million ($373 million), up 88 per cent over April sales, said a report.

A total of 278 transactions were registered, up 49 per cent year-on-year, stated National Bank of Kuwait in its report.

However, the residential sector still lags last year’s transactions and KD sales, down 16 per cent and five per cent, respectively. With the transactions almost evenly split between plots and homes, 65 per cent of the sold plots were in Funaites, Sabah Al Ahmad Sea City and Abu Fteera.

According to NBK, the activity in the real estate market improved ahead of Ramadan and the summer season, amid benign macro conditions and enhanced consumer confidence in May.

Real estate activity and KD sales picked up following a soft April, though sales continue to lag last year’s performance, with the exception of the commercial sector, said the Kuwaiti lender in its report.
 
Total sales totalled KD1.1 billion year-to-date (ytd), down 22 per cent from the same period last year. Meanwhile, NBK’s real estate price indices softened in May. Only the residential land price index managed to stay in positive territory, up 2.8 per cent year-on-year (y/y).

Residential real estate prices cooled off further this month. The NBK residential home price index slid to 166.7 points in May, retreating by 8.5 per cent y/y. The NBK residential home price index has been trending downward since the beginning of 2015, when it peaked at 186 points in January 2015.

May’s decline in residential home prices was not restricted to a few areas, but rather widespread across 23 out of the 57 areas included in the index; 20 residential areas exhibited price increases.

Similarly, the NBK residential land price index retreated in May; at 186.6 points, but the price index still logged a gain of 2.8 per cent y/y. Land prices were the first to correct, back in 2015.

According to NBK, the strong apartment sales boosted transactions in the investment sector. Smaller single apartments (for investment) dominated activity.

Apartment transactions represented 75 per cent of total transactions. The shift in the composition of investment sector sales toward individual apartments, rather than buildings, pressured KD sales, which fell 45 per cent y/y in May, while the number of transactions improved by 15.6 per cent y/y, it added.-TradeArabia News Service




Tags: Kuwait | growth | residential market |

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