(MENAFN- Kuwait News Agency (KUNA)) Following a slight recovery in June, real estate sector's sales continued to drop in July, the National Bank of Kuwait (NBK) reported in its monthly economic update on Wednesday. The real estate market seems to be going through a correction. Sales across the market's three main sectors (residential, investment, commercial) totaled KD 247 million, down 7.8 percent year-on-year (y/y) and 23 percent for the first seven months of the year compared to the same period last year. Some softness has been expected due to the Eid and summer holidays; but the market appeared to worsen as oil prices tumbled further in July Sales in the residential sector fell below the KD 100 million mark for the first time in almost three years. Sales totaled KD 98 million in July, down 28 percent y/y. Reminiscent of 2010's performances, the sector recorded only 251 transactions, dropping 41.5 percent y/y.
Activity was heaviest in the Ahmadi governorate, which accounted for 38 percent of all residential transactions. Mubarak Al-Kabeer governorate came in second, accounting for 15 percent of transactions. Vacant plots constituted 41 percent of all transactions in the residential sector. Sales in the investment sector also declined in July. Total sales reached KD 120 million, a 9 percent y/y decrease. However, the number of transactions increased by 16 percent compared to last year. Apartments accounted for 53 percent of all transactions while whole buildings constituted 44 percent of all transactions. The Ahmadi governorate once again witnessed the bulk of activity, with 55 percent of all transactions; Hawalli came in second with a 31 percent share. The largest transaction took place in Jahra for a plot sold at KD 4.2 million. The sector recorded a 26 percent decrease for the first seven months of the year compared to the same period last year.
The commercial sector was the only one to show y/y gains. Total sales in the sector reached KD 31 million, significantly higher than its performance in July 2014. The sector recorded nine transactions with the highest being for two complexes in Salmiya worth KD 7 million each. Sales in the commercial sector, known for its volatile performance, remains down 19 percent for the first seven months of the year compared to the same period last year, but has performed better than the others so far this year. The value of approved loans during the month was down 20 percent y/y, while disbursed loans were up by 41 percent y/y totaling KD 14.5 million, according to the report. The Public Authority for Housing Welfare (PAHW) began awarding plots in South Mutlaa City; the 29,000 unit project is the authority's largest to date. PAHW aims to distribute 12,000 units on paper by the end of the fiscal year; however physical distribution is expected in 2018, once the city's infrastructure is complete.
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