(MENAFN - Kuwait News Agency (KUNA)) The market database for the real estate sector shows an unprecedented rise in the prices of residential real estate, a specialized economic report said Saturday.
The report, by AlShall Economic Consultants, pointed out that the average price per square meter in selected residential areas in the six governorates, shows that there is a noticeable rise in residential real estate prices from 2000 until at least 2011.
"The average price per square meter went up by about 252.3 percent (2.5 times) in current price. When adjusted for inflation using the Consumer Price Index, the rise becomes about 137.7 percent (1.4 times), which is a substantial rise over 11 years," reads the report, based on AlShall database showing the historical trend of the real estate average prices during the period from 1981 to 2011.
The date also showed that the rise in real estate prices was not confined to residential real estate.
"Investment and commercial real estate likewise witnessed a rise from 2001 until 2007. They rose by about 407.4 percent for investment real estate and about 246.8 percent for commercial real estate. If we adjust for inflation, the rise becomes about 334.4 percent and about 197 percent, respectively, which are high rates over six years only." Alshall pointed that this unprecedented hike in real estate prices might be driven by understandable demand factors.
"However, this does not negate the possibility that the rise comes from limited supply, i.e. the state's monopoly of land. The rise in the price of land and properties seriously affects the competitiveness of the economy and is very costly to public finance," added the report.
With regard to the Kuwait Stock Exchange, AlShall noted that the performance of Kuwait Stock Exchange (KSE) for the last week was mixed, where all the indices showed a decrease, while the general index showed an increase.
"AlShall Index (value weighted) closed at 448.1 points at the closing of last Thursday, showing an increase of about 1.4 points or about 0.3 percent, and an increase of 9.9 points or about 2.3 percent compared to the end of 2012.