Kuwait property sales hit KD 275.7m in November

Kuwait's real estate sales totaled KD 275.7 million in November, double the amount it saw the same month last year, a recent economic report showed on Friday. The strong results came from a solid performance by all three major segments. These results could indicate improvement after some slowdown in the past few months, indicated the report, released by the National Bank of Kuwait (NBK). Residential sector sales totaled KD 137.6 million in November, a y/y increase of KD 50 million. The increase came from a larger number of transactions, despite having a slightly lower average transaction size compared to November 2011, it said. The three-month average (September - November) price for residential plots recorded KD 330/m2, while the comparable price for residential homes recorded KD 614/m2. These prices are aggregated across different governorates, as well as different specifications, and therefore only serve as a general indicator, the report added. The investment sector saw KD 70.2 million in sales during November, slightly down from the previous month, but a good y/y increase of about KD 22 million. This sector seems to be continuing its recovery from its seasonal slowdown and should continue to perform well in the near future, as healthy demand for the end-product (mainly apartments for rent) is sustained, it added. In terms of pricing, the three-month average price for apartments was KD 630/m2 for the October-November period, while whole buildings recorded KD 1, 397/m2. As for plots of land allotted to the investment sector, the three-month price stood at KD 944/m2. Sales in the commercial sector were uncharacteristically strong in November, totaling KD 67.9 million. Although a huge portion of that amount came from a single transaction for a plot of land in Kuwait City (valued at KD 53 million), the sector would still have been up y/y if that transaction were to be excluded. The commercial sector may see some recovery if it gets exposed to a more active government real estate fund. The Savings and Credit Bank (SCB) disbursed KD 9.2 million in loans, while approving an additional KD 19.4 million spread over 343 applications. Of the approved loans, 60 percent were for new constructions; while the purchase of existing homes as well as additions and renovations made up 25 percent and 15 percent of total loan applications respectively. Overall, the total amount of approved and disbursed loans saw different levels of increase y/y, pointing to robust demand in the residential sector, the NBK's report concluded.