Kuwait's real estate sales soar on housing demand

Kuwait's real estate market picked up momentum in May with sales surging to their highest level in 18 months hitting KD289 million ($951 million), up 37 per cent compared to the previous year, according to a report by National Bank of Kuwait (NBK). The residential and investment sectors provided significant support to Kuwait's real estate market, with sales increasing by 23 per cent and 38 per cent per cent year-on-year (y/y), respectively, stated the country's top bank in its report. Activity has been relatively volatile in recent months, with three of the last six months seeing elevated sales, something that could be signalling an end to the two-year slowdown. Real estate prices across most sectors continued to hold steady, currently off 9-10 per cent y/y, said the report. According to NBK, the residential sector bounced back following a soft April with sales jumped to KD138 million during the month, on 406 transactions. KD sales improved by 23 per cent y/y, supported by a 46 per cent rise in the number of transactions from a year ago. A surge in home purchases was witnessed during the last two months; 233 and 203 homes were sold in April and May respectively, the highest since March 2015. Residential real estate prices were flat in May, continuing to show a stabilising trend. The NBK residential home price index stood at 151.2 point, flat for the month, said the report. The index has been stable and in the vicinity of 151-152 points for almost three consecutive quarters, though it remains down nine per cent y/y. The NBK residential land price index retreated in May to 169.1 points and is down 9.5 per cent y/y. Investment sector activity was strong this month, compensating for April’s weakness. Sales came in at KD 87.7 million, up 38 per cent y/y. The number of transactions improved as well, advancing by 10 per cent from the previous year. Investment building prices logged a slight gain for the month. The NBK investment building price index stood at 185.1 points, up 1.7 per cent for the month, registering a five-month-high. The index is down 10 per cent y/y, an improvement from a few months back as it appears also to have bottomed out in tandem with prices in the residential sector, said the NBK in its report. Housing inflation, mostly comprised of housing rents, slowed from 6.4 per cent y/y in 4Q16 to a three-year low of 4.3 per cent y/y in the first quarter,