While property sales volume in Kuwait more than doubled in the second quarter, over the same period last year, the news is less spectacular considering 2009’s dismal activity level. The buying spree in residential and investment property didn’t carry over into commercial real estate, and loan levels are down dramatically. See the following article from Property Wire for more on this.
The real estate market in Kuwait is still facing a slowdown even although a record number of properties were sold in the Gulf state.
Actual sales soared 113% in the second quarter of the year compared to the same period in 2009, according to official figures.
Property sales increased to 596.87 million dinars ($2.07 billion) from 280.8 million dinars in the second quarter last year, the data showed. Residential property sales, which represent the biggest proportion of total real estate transactions, went up 144.5% in the quarter to 349.2 million dinars.
The figures also show that investment property sales rose 127% to 229.8 million dinars, while commercial property sales were down 41% in the second quarter of 2010 to 18 million, compared to the year earlier period.
The outlook, however, looks more impressive than it actually is because of the extremely low level of transactions during the whole of 2009, according to experts.
‘Activity through most of 2009 was unusually weak. But at their current levels, sales volumes are well above the average of 608 transactions per month seen during the pre-crisis era between 2003 and 2008,’ said a spokesman for the National Bank of Kuwait.
Property sales, especially for residential units, have been falling since state restricted private firms were barred by the government from residential real estate deals last year.
However, the total value of property sales fell by 30% fell to KD175 million in June compared to the previous month. And transactions in June were down 19% compared with May.
The report from the NBK said that slow borrowing had led to a drop in loans for buying houses and building new facilities, with the number of loans declining to 134 compared with 447 in late 2008. Loans for commercial expansion and renovation also fell, down by 24%.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.