Kuwait Real Estate News
Performance of Kuwait realty market likely to decline
According to the real estate sales report by the Ministry of Justice – Real Estate Registration and Certification Department, the performance of realty market in Kuwait declined during the second quarter.
The performance in the second quarter has been lesser than in the first quarter, with the total value of real estate sales, as the total value of property sales during the second quarter was KD749.1mn, a decline by 21.7 percent from KD957.3mn in the first quarter. The sales value during the second quarter was 37.1 percent less than sales value for the same quarter during 2007 (KD1,190.4 mn).
Also, a wide range of fluctuation has been noticed in realty sales during second quarter of 2008, as against the same months during second quarter 2007. The total sales value during April 2008 was registered as KD274.1mn, a decline by 23.6 percent compared to March sales value (KD358.7mn). The sales of April 2008 also declined by 27.1 percent from April 2007 (KD375.9mn). The weak performance in sales continued with sales value in May touch KD196mn, a decline by 28.5 percent from previous month sales, a decline by 48 percent from May 2007 sales value (KD376.8mn).
Before the summer holidays and travel season began in June, the sales rebounded to April 2008 level with a total sales value of KD279.1mn, an increase by 42.4 percent from sales in May. On the other hand, the sales value in June 2008 was 25.1 percent less than that in June 2007.
The number of sales for the main sectors of property market i.e., apartment, residential and commercial, registered a total 637 sales in April, a decline by 37.2 percent in May, and then increased by 16.6 percent in June, reaching 466 sales, when compared to May sales.
If the stagnation in Kuwait realty market noticed during the last two quarters, continued, few real estate and investment companies, could even consider other investment options by redirecting part of their investments and activities to international markets outside Kuwait, particularly in other GCC countries that witnessed a remarkable boom in real estate sector and other economic sectors during the last few years or to other Arab countries that offer many advantages and benefits to investors, which have produced high growth rate in their economies and good return on investments.
The apartment sector sales totaled to KD339.1mn, representing 45.3 percent of total market sales for this quarter. This led to an increase of apartment sales value to KD358mn during the first quarter, which represents 37.4 percent of that quarter. The residential sales performance declined during the second quarter to KD219.7mn, representing 29.3 percent of second quarter sales, less than that in the first quarter (KD502.9mn).
The total sales value for the commercial sector was KD155.5mn, representing 20.8 percent of the second quarter sales, representing 9.8 percent of the first quarter total sales. The industrial sale during the second quarter was KD31.2mn, as against 1.75mn of the first quarter sales.
It is likely that the performance of the real estate sector will keep declining during the third quarter 2008, particularly this quarter which includes traveling season, summer holidays and Ramadan month in September.
The number of sales is likely to decline with lower sales value, if no major changes occur in the economic parameters affecting the real estate market, nor ease in the lending policies by the CBK or redefining of laws 8 and 9/2008. Also, adapting practical and official policies for achieving transformation of Kuwait into an International Financial and Commercial Center.
Social Bookmarking
Read more news
> Property markets in GCC region to remain pressurized in 2012
> Kuwait property sector gathers pace following summer slowdown
> Kuwait realty sector post profits
> Kuwait records decline in expat count
> KAMCO report reveals positive indicators for Kuwait realty sector
> Majority of Kuwaitis investing in Dubai properties
> Latest Kuwait property sales report indicates improvement in the sector
> Increased demand for properties in Kuwait realty sector
> Property experts seek private sector support to develop housing sector
> KFH launches promotional campaign to finance residential real estate