NBK Capital MENA Research stated in its weekly report, that Kuwait’s real estate data for March showed sales totaling KWD 351 million, up 20% y/y.The investment arm of National Bank of Kuwait said March monthly sales are the highest this year, closing the 1st quarter with sales totaling KWD 923 million.
Sales were up across all sectors with an exceptional performance by the commercial sector. The residential and investment sectors remained solid, and the real estate sector is expected to have another strong year. Sales in the residential sector reached KWD 177 million in March, a 19% y/y increase. Although there was a 10% y/y decline in the number of transactions to 439, this was more than offset by a rise in the average transaction value. The latter increased 32% y/y to KWD 403,000.
It is worth noting that despite strong year-on-year increases in sales, the number of transactions has been dropping (year-on-year) in past months - a possible reflection of the short supply of residential properties available on the market.In terms of location, 34% of transactions were in Al-Ahmadi governorate, followed by Mubarak Al-Kabeer with 25% of transactions.
Sales of land plots – as opposed to finished buildings – accounted for 57% of all residential transactions in March. Quarterly, Al-Ahmadi also led the governorates with 33% of all transactions in the first quarter followed by Mubarak Al-Kabeer, which has been seeing increased activity in the Abu Fateera and Funaitees areas.
Sales in the investment sector stood at KWD 132 million in March, up 9% y/y. The sector also saw a 53% y/y increase in the number of transactions, recording 195 transactions by the end of March. The increases reflected on the average size of transaction which dropped 29% y/y, to KWD 680,000. In quarter analysis, the investment sector sales grew 35% compared to Q1 of 2013.Individual apartments made up more than half of all transactions in the investment sector – the majority in Mahbola. Whole buildings came in second, accounting for 32% of transactions, followed by plots with an 11% share.
Sales in the commercial sector soared 92% to KWD 42 million in March, from KWD 22 million a year earlier. The sector recorded 12 transactions, with one plot in Jahra selling for KWD 11 million. Sales in this sector are often uneven month-to-month. While the sector’s performance in the first two months of 2014 seemed to be cooling, March sales confirmed a strong bounce back.
March also witnessed two significant transactions classified by the Ministry of Justice as ‘coastal line’ properties. The first is a 4,000 m2 residential plot in Messila sold for KWD 9 million, while the second was a 3,700m2 commercial ‘shops’ transaction in Mahbola, for KWD 7 million.Kuwait Credit Bank approved KWD 29 million in loans in March, down 16% from a year ago.
The past year has nevertheless been a very active year for the bank. The slowdown in the past couple of months may be linked to a slowdown in the distribution of plots.
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