(MENAFN - Kuwait News Agency (KUNA)) Real estate sales in March totaled KD 246 million, almost flat year-on-year (y/y), the National Bank of Kuwait (NBK) said in a report.
Total real estate sales continue to be supported by solid residential and investment figures, but are being hindered somewhat by a sluggish commercial sector, it said.
Residential sector sales were KD 147.4 million in March, almost unchanged month-to-month (m/m), but up a solid KD 13.5 million (10 percent) y/y. Unlike the first two months of the year, the uptick in sales was due to a larger average transaction size (as opposed to higher number of transactions).
About 56 percent of spending in this sector went into buying plots of land, with the rest going into buying finished homes, which is in line with the trend for the past year or so, the report added. Residential sales made up 60 percent of total sales for the month and should continue to do well in the near future, as they appear backed by solid demand.
The investment sector saw KD 93.4 million in sales during March and averaged over KD 100 million a month in 1Q2012. Most sales in this sector go into buying finished apartments or buildings intended for rent (about 78 percent in March), while the rest are the purchase of plots of land intended eventually for the same purpose.
Most apartments and buildings sales for the month took place in the Hawalli and Ahmadi governorates, while most plots sales were split between Ahmadi and the Mubarak Al Kabeer governorates.
Total sales for March in that sector increased 10 percent y/y, primarily due to a 35 percent y/y jump in the number of transactions.
The commercial sector recorded KD 5.3 million in sales, split between 2 transactions, compared to KD 30 million in March 2011. Month to month volatility is common in this sector and does not necessarily indicate a larger down trend, according to the report.
The Savings and Credit Bank (SCB) disbursed KD 10.6 million in loans during March. The majority (62 percent) of the money will go into constructing new houses, about 22 percent will be used to buy existing homes, and the remainder will go into additions and renovations.
The SCB also approved KD 15.1 million, spread out over 294 loans. Similarly, 61 percent of the approved loans will go into financing new house constructions. Both approved and disbursed loans saw y/y increases in value, indicating healthy demand in the residential sector.
March saw strong sales in the largest two sectors, and would have recorded overall better results had it not been hindered somewhat by a lagging (and volatile) commercial sector, the report concluded.