Kuwait Real Estate News
Property sales in Kuwait shows 22 percent yearly growth
The real estate data for the month of February 2014 shows a total of KD266mn worth sales, marking a 22 percent year-on-year increase, states the latest economic update by National Bank of Kuwait (NBK). Although solid, the sales were possibly negatively affected due to February being the shortest month, which includes National Day public holidays.
Taking this into account, the underlying performance may have been stronger, as sales growth in residential and investment sectors continued to remain good, and only the rather unpredictable commercial sector saw negative growth year-on-year.
Sales in the residential sector touched KD137mn in February, marking 32 percent y-o-y increase, despite the number of transactions having fallen 7 percent y-o-y. But, this was offset by rise in average transaction value.
But, despite the strong y-o-y increases, the prices have remained volatile over the past few months. However, given the seasonal factors mention above, it is too early to conclude that the market is witnessing a sustained cooling off.
About 32 percent of transactions were in Mubarak al-Kabeer governorate, apart from Abu Fateera and Funaitees areas (mostly plots were sold). Another 30 percent of transactions went to Al-Ahmedi governorate. Sale of land plots, as opposed to completed buildings, accounted for 60 percent of all residential transactions in the month of February.
Sale in investment sector stood at KD120mn in February, marking 29 percent y-o-y, but, was down 15 percent m-o-m. The m-o-m decline in sales was lowered by several transactions mostly due to seasonal effects.
However, overall, interest in the sector continues to remain good with sales levels remaining solid from historical perspective, and average price levels per m2 having recovered strongly after dip in fourth quarter last year. The sector has been considered as a viable alternative to stock market for investing.
Whole buildings constitute more than half of all transactions in the investment sector, with majority in Mahbola. The Individual apartments came second, accounting for 35 percent of transactions, followed by plots with 13 percent share.
The sale in commercial sector dipped 60 percent, touching KD8.4mn in February from KD21mn a year earlier. Sales in this sector are often uneven month-to-month.
Although the year 2013 was an exceptional year for the sector, part of this may have come from purchases by government-held portfolios.
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