The real estate sales in Kuwait moderated to KD 211 million in October 2019, down 31 per cent month-on-month (m/m) and 26 per cent year-on-year (y/y), said the National Bank of Kuwait (NBK) in its December report on property sector.

This was mainly due to a sharp drop in the commercial sector, which saw the weakest monthly sales since August 2010. However, residential and investment sector sales were “decent”.

“This follows a robust third quarter, with sales of KD 825 million, up 2.8% q/q (Quarter-on-quarter) but down a negligible 0.8% y/y. Prices were mixed as of October, with the residential sector continuing to display a positive trend with strong year-on-year gains, while investment prices continued to be moderately negative on an annual basis due to fundamental weakness (surplus of apartments, soft demand),” said the bank.

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Meanwhile, investment sector sales rose 17 percent m/m and 9 per cent y/y to KD 107
million in October, lifted by some exceptionally large building transactions, coupled with a 4 percent m/m rise in building prices.

Building transactions alone totaled nearly KD 100 million, of which KD 34 million stemmed from two large, 6000 sqm properties in Mahboula. This follows a muted third quarter for the investment sector, in which sales declined 16% q/q and 32% y/y to KD 270 million, due to lower number of transactions.

“We expect the price trend to remain slightly negative in this sector until the imbalance between softer demand and oversupply starts to subside, as there is good reason to believe that a relatively large number of vacant apartments have yet to be absorbed by the market,” said NBK.

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Residential sales fell 26 percent m/m, 25 percent y/y, to KWD 104 million in the first month of the fourth quarter of the year, while the number of deals dropped to 314. However, the residential sector saw solid performance in Q3-19 when sales increased by 13 percent y/y, registering KWD 359 million.

Commercial sector sales in October fell to the weakest level since August 2010, at only KD 400,000, driven by sharp 79 percent drop in transactions.