(MENAFN - Kuwait News Agency (KUNA)) Real estate sales during October totaled KD 219 million, a KD 40 million year-on-year drop.
A slowdown in residential sales was the major reason behind the drop, whereas sales in the investment segment were up y/y, a report by National Bank of Kuwait (NBK) said Tuesday.
Commercial sales, the smallest among the three main real estate segments, saw y/y declines, in line with trend. The cooling off of the real estate sector comes after a strong performance earlier this year.
"Residential sector sales totaled KD 142.6 million in October, a decent m/m increase, but a y/y decrease of KD 18.7 million nonetheless. For the second month in a row, the slowdown came as a result of a lower number of transactions.
Overall, Ahmadi governorate saw 40 percent of the transactions, bringing in a quarter of total value of sales for the month. As for the type of transactions, October saw an even split between plots of land and finished homes - similar to the previous month, though plots usually take a larger share.
"The 3-month average (August - October) price for residential plots recorded 369 KD/m2, down m/m; while the price of residential homes climbed to 625KD/m2. These prices should not be overstrained, as they are vulnerable to outside factors (beyond simple price inflation).
"The investment sector saw KD 74.9 million in sales during October, almost unchanged from the previous month, but a sizeable y/y increase of KD 18 million. Overall, the investment sector continues to recover from its seasonal slowdown. With the possibility of some intervention by the government's national real estate fund, the sector's recovery should continue in the near future.
"A little over half of the transactions in the investment sector were for single apartments, whereas this type of transaction usually takes up less than a third of total. In terms of pricing, the 3-month average price for apartments was 624 KD/m2 for the August-October period, compared to a year average of 610 KD/m2 in 2011," the report cited.
"The commercial sector saw 6 transactions, bringing in a total of KD 1.6 million in sales. Though sales in this sector tend to be volatile, sales in October were the lowest for the year, this sector could really benefit from the expanded real estate government fund.
"The Savings and Credit Bank (SCB) approved KD 22.4 million in loans, spread over 394 application - two thirds of which were for new constructions. The SCB also disbursed KD 8.9 million in loans. All of these figures were increases compared to their counterpart from a year ago, an indication of healthy demand in the residential sector," the report concluded.