The activity of Kuwait’s real estate market continued its downward trend with the total value of property sales shedding 25 per cent of their year-on-year value to stand at KWD2.3 billion in the first nine months of the current year.
The National Bank of Kuwait said in a report that a strong 2014 and lower oil prices have been the prime reasons for weakness in the local real estate market.
However, a report published by the Kuwait Times indicates that most of the real estate price indices showed positive annual growth except for the residential home index, which remained in negative territory since last month.
Detailing the statistics, the report reveals that total residential sales in 2015 amounted to KWD1.065bn, including KWD82.2 million in September. The value as well as the number of units sold year-to-date (ytd) were both down by 24 per cent and 29 per cent, respectively, compared with the same period last year.
The report says that the government’s commitment to distributing roughly 12,000 plots each fiscal year might have been one of the factors behind the steep decline in activity.
Real estate investors appear to have shifted their appetite towards the commercial sector, where sales have also dropped, though less severely. In September, this sector saw 11 deals worth KWD45m.
Sales in the commercial sector grew by 12 per cent ytd mainly as a result of higher demand for retail space by start-ups and SMEs primarily in the food and beverage industry.
(KWD1 = AED12.13, at the time of publishing)