Kuwait sees property sales plunge alongwith Palm Jumeirah

Kuwait sees drop in property prices

The property market in Kuwait saw real estate sales plunge an average of 60% in January, the tenth month in a row of decline after the government imposed property restrictions to tackle inflation.

Official figures show that residential sales, which represent the biggest proportion of total sales, fell 72.6% year-on-year to 34.59 million dinars ($117.3 million).

Investment property sales fell 45.6% in January while commercial property sales were up 22.7%. Real estate sales were down 45.9% in December and 43.3% in November.

Last year the government introduced regulations barring private firms from buying and selling residential units to try to restrain real estate prices.

It is a pattern being seen across the Gulf. The latest figures from Dubai show that prices on Nakheel's flagship Palm Jumeirah development have fallen to below $272 per square foot for the first time since the fall in prices began late last year.

Several distress sales on the project have seen prices for two bedroom apartments, measured at just over 1,500 square feet, drop to AED1.4 million. Some sellers are offering similar properties for just AED1.3 million.

The drop is being accelerated by the Golden Mile project, developed by IFA Hotels & Resorts, which is due for handover beginning next month, according to real estate agents. There many luxury two bedroom units at over 1600 square foot are being offered for AED1.5 million.

'The problem on the Golden Mile is that many owners are trying to sell their properties before hand over and are now prepared to take close to what they paid for them in the first place. This has meant the whole Palm area is seeing prices depressed,' said one estate agent who asked not to be named.

Late last year, estate agents reported selling two bedroom units on the Palm for close to AED4 million, three times the current price.