KUWAIT, April 24 (KUNA) -- Real estate activity roared back to life in March, providing the first sign that recovery in the sector may be stepping up a gear, according to a recently specialized report.
The total number of registered property sales (residential, commercial and investment) almost doubled to 760 in March, up from 383 in February and 97 percent higher than a year ago. This was the strongest performance in two years, putting volumes back at pre-crisis levels, the Real Estate Report, released by the National Bank of Kuwait (NBK), indicated.
Nonetheless, the March data suggest that there may be scope for activity to surprise on the upside, helped by improving confidence and stronger demand for land, especially as the government pushes on with its economic development plans, it said, adding that all three market segments recorded significant gains in sales in March. Though by virtue of its large size, the biggest contribution came from the residential sector.
In KD value terms, sales also registered their highest level for nearly two years, reaching KD 206 million in March, up 107 percent on February. The year-on-year increase jumped from negative territory to 130 percent, helped by a base effect following very weak sales a year ago, the report noted.
Residential sales more than doubled to 598 in March, from 255 in February. This was the highest level for two years and well above the average of 464 per month seen over the past five years. Alongside strong volumes, the average value of residential transactions, at KD 237,000, rose to its second highest level ever, a decent recovery after the sharp drop seen through 2009.
The detailed weekly data suggests that a large number of relatively high value land sales at the Khairan Pearl development area in southern Kuwait contributed to high averages in March.
The investment segment also enjoyed a decent March, though its improvement was less pronounced than that in other sectors. The number of investment sales rose to 154 from 124 in February. This is well above the average of 100 per month seen through 2009. The year-on-year improvement, at 29 percent, is below that of the residential sector.
There were eight commercial property transactions during March, up from four in February. Despite this rise, the commercial sector is the segment where it is most difficult to spot any material improvement in underlying conditions. While the number of transactions was up in March, they were not of especially large value - averaging KD 1.8 million each, well below the average of KD 3.1 million per transaction in 2009, the NBK's report concluded. - Kuna