Feb 29 2012
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Kuwait real estate sales strong in Jan - NBK ECONOMIC REPORT
KUWAIT: Real estate sales activity picked up in January, totaling KD 318.1 million in value, a 64% increase year-on-year (y/y). The level was the third best level on record. All three sectors of real estate saw big increases, with the residential sector taking up 54% of total sales. The uptick in sales should persist for the year albeit perhaps with less impetus.
Residential sector sales were KD 170.3 million for January, a 40% y/y climb. A major contributor to this increase was the high number of transactions concluded, totaling 806 transactions --a 4-year peak for the sector. The majority of these transactions (71%) were for plots of land, as opposed to finished homes.
Residential sales should continue to do well in the near future, as it appears backed with solid demand.
The investment sector (mainly apartments and buildings intended for rental), saw KD 127.3 million in transactions for January, a little more than double the amount of last January. This was supported by a higher average transaction size, compared to 2011. Although this sector has mostly trailed the residential sector in monthly sales value, it continues to be a major factor in the recovery of the real estate sector as investors look for income property and investment alternatives.
The commercial sector recorded 8 transactions in January. They totaled KD 20.5 million in value, an increase of KD 11.5 million from last January. Month to month volatility in both monetary value and the number of transactions is common in this sector.
The Savings and Credit Bank (SCB) approved 298 housing loans, totaling KD 16.2 million. Of these loans, 59% will go into financing new houses constructions while 31% will be used to purchase existing homes. Additionally, KD 10.9 million loans were disbursed by the SCB, a 22% y/y increase.
January saw a strong start for the real estate sector in 2012. The pick-up in activity should be sustained through the year.
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