Kuwait property sales down 20% in January

Real estate sales in Kuwait during January totaled KD254 million ($893 million), down 20 per cent year-on-year, a report said. Both the residential and investment segments saw activity slow year-on-year (y/y), while sales in the commercial sector were up compared to January 2012, added the latest Kuwait Economic Brief released by the National Bank of Kuwait (NBK). While the overall decline may reflect market sluggishness, timing issues may have driven at least part of the decrease, as the first few days of January were included in the December 2012 data, NBK pointed out. Residential sector sales stood at KD145 million in January, down by KD25 million y/y, but similar to the overall 2012 average. The drop in sales came from a lower number of transactions (with the average transaction size being up y/y). About two-thirds of these transactions were for buying plots of land, with the remainder for already-constructed homes. The 3-month average (November – January) price for residential plots was KD349 per sq m, while prices of residential homes recorded KD634 per sq m. These prices are aggregated across different governorates, as well as different specifications, and therefore only serve as a general indicator, according to the brief. The investment sector – which is made up mostly of apartments and buildings intended for rental – saw sales reach KD75 million in January, KD52 million less than January 2012. The underperformance in January was due to both a lower number of transactions as well as a smaller average transaction size, which were down 33 per cent and 13 per cent, respectively. These transactions were close to a three-way split in January between the purchase of individual apartments, whole buildings, and empty plots of land. Typically, buildings make up about half of all investment transactions. As for the three-month average price, apartments reached KD642 per sq m, while whole buildings recorded KD1,307 per sq m. Commercial sector sales totaled KD34 million, up KD14 million y/y. This was the third consecutive month of y/y increases, the report noted. While this could possibly reflect an underlying improvement, recent months have seen exceptionally large single transactions that have boosted the figures. For January, this was in the form of a KD15.1 million plot of land purchased in the Hawalli governorate. NBK said the commercial sector has traditionally been more volatile than the other two major segments, and separating its trends from outliers can be difficult. The Savings and Credit Bank (SCB) approved 293 loans in January, totaling KD15 million. About half of the loans were to fund new constructions, while the rest were split equally between purchases of existing homes and the funding of additions and renovations. Additionally, little more than KD10 million of loans were disbursed. Overall, SCB activity was soft compared to recent months, according to the brief. TradeArabia News