Kuwait real estate market for the Q2 2008 |
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KUWAIT: The performance of the real estate market in Kuwait declined for the second quarter. According to the real estate sales reports issued by the Ministry of Justice - Real Estate Registration and Certification Department. The second quarter performance was less than the first quarter, as the total value of real estate sales (title deeds and power of attorney) which took place in the second quarter was KD 749.1 million declined by 21.7% from KD 957.3 million in the first quarter. The second quarter sales value was 37.1% less than the sales value for the same quarter in 2007 which was KD 1,190.4 million.
In addition, the second quarter 2008 has fluctuated widely from month to month, on the contrary of the same months of the second quarter 2007, which were almost leveled as show in figure No 2. The total sales value (title deeds and power of attorney) registered in April 2008 was KD 274.1 million declined by 23.6 % compared to March sales value, which was KD 358.7 million. April 2008 sales also declined by 27.1% from April 2007 sales value, which was KD 375.9 M. The weak performance in sales continued in May with sales value of KD 196 million declined by 28.5% from previous month sales, and reduced by 48% from May 2007 sales value, which was KD 376.8 million.
In June, before the summer holidays and traveling season, the sales rebounded to April 2008 level with a total sales value of KD 279.1 million rose by 42.4 % from May sales. On the other hand, June 2008 sales value was 25.1 % less than June 2007 sales value, which was KD 372.6 million. The number of sales for the main sectors of real estate market - residential, apartment and commercial -registered in April totaled 637 sales, declined by 37.2 % to 400 sales in May. Then increased by 16.6 % in June to reach 466 sales compared to May sales. Figure No 3. shows the fluctuating performance of each sector from month to month in the second quarter.
Due to the real estate market stagnant situation in Kuwait during the last two quarters, if continued, some investment & real estate companies could consider other investment option by redirecting part of their investments and activities to international markets outside Kuwait, especially in other G.C.C counties, which witnessed a remarkable boom in real estate sector and other economic sectors in the last few years, or to other Arab countries, which provide many facilities and advantages to investors, which have high growth rate in their economies and adequate return on investments.
As for the participation of real estate sectors in the second quarter sales, the apartment sector sales value totaled KD 339.1 million, representing 45.3 % of the total market sales for this quarter. It increased from apartment sales value totaled KD 358 million in the first quarter, represented 37.4 % of that quarter. The residential sales performance declined in the second quarter to KD 219.7 million, representing 29.3 % of the second quarter sales, which is less than its sales in the first quarter which was KD 502.9 million representing 52.5 % of the first quarter total sales, as shown in figure no. 6.
As for the commercial sector, the total sales value was KD 155.5 million representing 20.8 % of the second quarter sales, while this sector sales was KD 93.5 million representing 9.8% of the first quarter total sales. The industrial and storage sectors had a slim segment in the market sales in the second quarter. The industrial sales in the second quarter was KD 31.2 million representing 4.2 % of the market sales against sales of KD 1.75 million representing 0.18 % of the first quarter sales. The storage sales value in the second quarter was KD 3.4 million representing 0.5% of total market sales, against sales of KD 1.2 million representing 0.12 % of the first quarter sales.
It is expected that the real estate sectors performance will keep declining in the third quarter 2008, especially this quarter will include the summer holidays, traveling season and Ramadan month in September. The number of sales expected to decline with lower sales value, if no major changes occurred in the economic parameters affecting the real estate market nor easing the lending policies by the CBK or redefining the laws 8 & 9 / 2008. In addition, adapting practical and official measures to achieve the conversion of Kuwait into an International Financial and Commercial Center.
© Kuwait Times 2008
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