Kuwait's real estate market is booming as conventional banks push for the right to offer mortgages in the country. The lack of lending options has kept the country's real estate market in check, but with pressure mounting, investors are hopeful that the government will give in. Property prices are already up 50% so far in 2012. For more on this, continue reading the following article from Property Wire.
The value of real estate transactions in Kuwait rose by nearly half, year on year in the first three months of 2012, according to a report from Kuwait International Bank (KIB).
Total values reached US$3.2 billion, and increase of 49% compared to the same period last year and the number of deals was 2,657, up 69% compared to the first quarter of 2011.
January saw the highest number of sales, recording 1,022 deals worth US$1.279 billion, the report also shows and the majority of sales in the housing sector were in Sabah Al-Ahmad city, followed by Abu Ftaira, Funaitees, Khairan and Salam.
‘These figures reflect interest of medium income investors in new districts where prices are generally affordable,’ the report said.
The figures come at a time when analysts believe that Kuwait banks are looking to offer mortgages to boost the market. Islamic lenders already offer home financing packages but conventional lenders are restricted from doing so, putting them at a disadvantage.
‘Mortgages are something that is a big problem here in Kuwait. Conventional banks are upset and not happy and we aim to put pressure on the government,’ said Aly Mahmoud Shalaby, head of consumer banking at Gulf Bank, Kuwait’s second largest lender by market value.
The lack of mortgage options has left a number of buyers struggling to secure financing to purchase their own home. A government lending scheme offers first time buyers a loan of $254,684 and many nationals apply for a 15 year personal loan to top this up.
But Shalaby said this is usually not enough to cover the price of buying and building a reasonable villa.
This article was republished with permission from Property Wire.