KUWAIT: Residential and investment real estate prices in Kuwait witnessed a significant rise in the final quarter of 2010, while commercial real estate continued to suffer as a result of large supply and weak demand, according to an economic report issued yesterday. The price trend continued to provide positive indications, as the residential and investment real estate sectors held on to steady year-round highs.

Commercial real estate, such as offices and commercial sites allocated for companies, however, did not witness any improvements in prices per square meter, continuing to drop in value. This sector has been lastingly affected by the international financial downturn in recent years, the Global Investment House report added.

The report predicted that property prices in the residential and investment real estate sectors would continue rising, following the emergence of reports from the International Monetary Fund, which forecast an increase of two percent in Kuwaiti GDP this year as a result of the astonishing rise of global crude prices.

The report also indicated that the billion dinar portfolio established by the Kuwait Investment Authority - which aims to invest in the commercial real estate sector in the medium and long-term, would help to raise the per-meter value of property in this sector. Revenues from this sector don't currently exceed five percent, falling by at least half of that before the downturn.

The residential real estate sector, however, witnessed demand levels exceeding supply, with the numbers showing a 47 percent rise in transactions during 2010 totaling around KD2 billion. According to the report, transactions in the investment real estate sector rose by 62 percent from the third quarter of this period, totaling KD 188 million in value. - KUNA