Kuwait real estate sales grew by 22% in February

The National Bank of Kuwait (NBK) reported Friday that the local real estate data for February show sales totaling KD 266 million, up by 22 percent year on year (y/y).Although solid, sales were likely negatively affected by the short nature of the month of February, including the National Day public holidays. After accounting for this, underlying performance may therefore have been stronger.Sales growth in the residential and investment sectors remained good, while the more unpredictable commercial sector saw negative growth y/y, according to the NBK monthly market report.In terms of location, 32 percent of transactions were in Mubarak Al-Kabeer governorate, mostly plots in Abu Fateera and Funaitees areas. Another 30 percent went to Al-Ahmedi governorate. Sales of land plots - as opposed to finished buildings - accounted for 60 percent of all residential transactions in February. Sales in the investment sector stood at KD 120 million in February, up 29 percent y/y, but down 15 percent month on month (m/m). The m/m decline in sales was driven by a lower number of transactions - perhaps attributable to seasonal effects. But overall, interest in the sector continues to hold up well.Sales levels remain solid from a historical perspective and average price levels per m2 have recovered strongly after a dip in 4Q last year.The sector has long been viewed as a viable alternative to the stock market for investing. Whole buildings made up more than half of all transactions in the investment sector - the majority in Mahbola. Individual apartments came in second, accounting for 35 percent of transactions, followed by plots with a 13 percent share.Sales in the commercial sector dropped 60 percent to KD 8.4 million in February, from KD 21 million a year earlier. Just three transactions were recorded in the sector with one complex in Hawalli selling for KD 4.8 million, the report went on. Sales in this sector are often uneven month-to-month. While 2013 was an exceptional year for the sector, part of this may have come from purchases by government-held portfolios. Away from sales, Kuwait Credit Bank approved KD 23 million in loans in February, down 5 percent from a year earlier.The past year has nevertheless been a very active year for the bank. The slowdown in the past couple of months could be linked to a slowdown in the distribution of government plots, it added.