Kuwait Property Market
Property market in Kuwait saw 57% growth during first half of 2007
The Real Estate Sector in Kuwait continues to grow with the market witnessing 57% rise in sales, during the first two Quarters of 2007, when compared to the same period last year.
The recent reports by the National Bank of Kuwait (NBK), reveals that about thousand sales transactions have been recorded during the last month, with an estimated value worth $855million, the highest on record. Average prices of the commercial units and apartments also went up by 8% over the previous year.
On the whole, the property market has experienced an extraordinary surge, as oil revenues have flooded into certain new projects and towers, crowding the urban centers in Kuwait, such as the Salmiya, Sharq, Kuwait City, Fahaheel, and Hawally.
However, the Oxford Business Group, in their reports has mentioned that it is the housing and residential market that has been the backbone behind the country's growing property market, with the limited supply and demographics.
The increase in population in Kuwait, coupled with high levels of liquidity, political stability and escalating regional markets, have laid an environment that is suitable for property investment, attracting both expatriates and locals into investing in residential apartments and villas.
The NBK report's figures indicate that it was the increase in the value of housing sale transactions that grew by more than 64% and that helped in maintaining the current property boom in Kuwait. The number of units sold also has increased dramatically, witnessing 52% increase in the residential sector and 54% increase overall during the first half of 2007, in comparison to the same period last year.
The deficiency in the availability of land has also contributed in escalating the land rates and the transaction value. In Kuwait, a major portion of the lands is owned by the Government, with 95% estimates. Due to such reasons the costs of land has mounted up sky-high.
However, despite the increased volume in sales, the residential construction has not been on par with the high demand. The number of building permits has risen from 2600 during 2004 to 3000 in 2006. However, until now, only few units were making their entry into the market. Although, Kuwait's construction industry is considered to be strong in the region, with a value nearing $4billion, it faces serious bureaucratic procedures and the material costs often results in sudden delays.
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