Kuwait's residential sales hits a two-year high of $1.2bn
Kuwait's real estate sales were relatively stable during the third quarter of 2024, mainly due to a recovery in residential sales from weak levels of previous quarters and a surge in investment sales, outweighing a fall back in commercial activity, said National Bank of Kuwait in its Economic Insight for October 2024.
The residential sales in Q3, at KD384 million, were the strongest in almost two years, with the sector also posting the fastest quarterly (14% q/q) and annual (8.2% y/y) increase since 2021, it stated.
The overall trend points to gradually improving real estate market activity, with the outlook helped by the commencement of the monetary easing cycle in September.
On the price front, residential prices continued their downward trend in Q3, for the sixth consecutive quarter, lowering the valuation gap with the investment segment and stimulating demand.
Meanwhile, government plot distributions came to a complete halt during the third quarter after Q2's strong performance, resulting in an increase in the backlog of housing applications to 97,700.
According to NBK, the overall real estate sales in Q3 declined by a modest 0.8% q/q to KD847 million, following a strong showing in Q2.
Activity was supported by strong residential and investment sector sales, with transaction volumes increasing despite the seasonal impact of the summer months.
On the other hand, commercial sales, which surged in Q2 to a record level, fell sharply, though were still above the 2023 quarterly average, it stated.
The Kuwaiti real estate transaction volumes were up by 26% q/q and 21% y/y, respectively, from the previous quarter's post-pandemic low.
Around 40% of these transactions were logged in September, which saw the highest volume of activity in 16 months (42% y/y), said NBK in its report.
Most residential sales were in the 'home' segment (65% of total), concentrated mainly in the Kuwait City, Hawalli and Al-Ahmadi governorates. On the other hand, around 90% of all land sales occurred in the Hawalli, Mubarak Al-Kabeer and Al-Ahmadi governorates, it added.
According to NBK, the uptick in demand could partly be explained by cyclical forces, but also falling residential valuations, a multi-quarter trend.
Overall prices remain high, especially in the inner areas, and in terms of affordability, real estate prices in Kuwait City are still one of the least affordable among GCC peers, it stated.
Meanwhile, the investment segment logged sales of KD317 million (42% q/q; 49% y/y), a near-five-year high. Sales were concentrated (76%) in the inner, Kuwait City and Hawalli governorates.
Underlying demand was supported by a continued rise in non-Kuwaiti residents (up 1.4% in H1 2024), though housing rents rose only 0.7% y/y during Q3 2024 based on the readings from the consumer price index, said the NBK in its report.
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