Kuwait real estate boosted by residential sales in July
The real estate sector continued to appear stable with activity improving in July despite the summer season, the latest National Bank of Kuwait commentary finds.
Real estate sales in the country grew 11.8 per cent year-on-year (y/y) in July to KWD161.5 million.
Transactions gain traction
Real estate transactions on the other hand have gained more traction since the beginning of this year, recording a 30 per cent increase y/y, with support from the residential sector.
Real estate prices across most sectors continued to hold steady, although they were still off by 5-10 per cent y/y. Residential sector sales grew 43.4 per cent y/y in July to KWD90.3m.
The number of transactions in the sector was 268, a third of which were plots and the rest were predominantly homes.
Though activity was roughly well distributed in a number of areas, more than 30 transactions took place in each of the Abu Ftaira and Sabah Al-Ahmad Sea City.
Home index up
The improved momentum in the residential sector was reflected in the NBK residential price indices.
The residential home index witnessed a healthy uptick for the first time in almost a year of stable performance.
The residential land index stood at 163 points, down 11 per cent y/y, hovering around H12013 price levels.
The increased supply of residential land, predominantly due to the healthy distribution of subsidised plots by the Public Authority for Housing Welfare (PAHW), may have exercised some downward pressure on land prices.
Investment sector activity remained anaemic. The sector’s sales totalled KWD57.5m, down by six per cent y/y.
The number of transactions picked up in July to 100 from June’s 74, but remains slightly below 2016’s monthly average of 108 transactions. More than 70 per cent of the transactions were apartment sales, predominantly in Bnaid Al-Qar, Sabah Al-Salem, and Mahboula.
The NBK investment building price retreated slightly in July in tandem with the slowdown in the sector’s activity. The index slipped slightly in July to 181.5 from 188.3 in June.
The index is down six per cent y/y, an improvement from the double-digit decline rates recorded the previous year.
The commercial sector recovered somewhat from its 2017 low, with sales amounting to KWD13.8m in July. Four transactions were recorded in July, the largest being a commercial building in Farwaniya for KWD 6m.