According to the official data, Kuwaiti real estate sales plunged 47% in quarter two of 2009 compared to the year earlier with the blame being put down to the global financial crisis.
Property sales fell to 280.8 million dinars from 529.1 million dinars in the Q2 last year. In the residential sector, which represents the biggest proportion of total real estate transactions, sales fell 28.1% in the quarter to 142.8 million dinars.
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.
Investment property sales fell 55.6% to 101.19 million dinars, while commercial property sales were down 64.1% in the second quarter of 2009, compared to the same period a year earlier.
Commercial property in Kuwait typically refers to apartment buildings meant for leasing, mainly to foreigners, ‘The economy is not growing and is deceleration. You have job destruction and job destruction could lead to higher population risk which will in turn add to the uncertainty on the real estate side,’ said Saud Masoud, Real Estate & Construction Analyst, UBS in Dubai.
However a separate report from Kuwait based Emaar Company for Real Estate Services said that property prices in Kuwait increased 15% in July. The return of Kuwait Finance House and other Islamic financial institutions to the property lending market have contributed to the increase, the report claims.
Property owners reacted positively to the move and transactions increased during the month across all Kuwaiti governorates, the report added.
Indeed, according to the real estate registration department at Kuwait’s ministry of justice, sales in the private residential sector increased by 55% in July transactions with 307 contracts worth a total of KD55.06 million.
The department indicated that Mubarak Al-Kabir governorate was top with 85 contracts, followed by Al-Farwaniya with 80 contracts, Hawalli with 45, Al-Asima 26 and Al-Jahra with 25.
The Kuwait Financial Centre confirmed that it is looking beyond Kuwait to buy and is examining distressed real estate in Abu Dhabi. It has set aside $50 million to invest in the UAE emirate’s struggling property sector.
