Kuwait's property sales jumped 18 percent in June compared with May led by the residential property sector, a specialized economic report showed Friday.

"Real estate sales in June totaled KD 266 million, almost unchanged from June of last year but up 18 percent month-on-month. The residential segment rallied while both the investment and commercial segments lagged, netting a small 1.2 percent y/y increase in sales," the report, by the National Bank of Kuwait, reads.
It pointed out that the residential sector sales totaled KD 148.0 million in June, an increase of KD 34 million y/y on the back of an increased number of transactions.

"Ahmadi governorate saw the highest number of transactions for plots of land (65 percent of total plot sales), with Mubarak Al Kabeer being a distant second. As for home sales, Hawalli governorate saw the most activity (25 percent of home transactions), with Ahmadi governorate being a close second. Sales in the residential sector continue to show robustness, in line with an overall view of a healthy household sector." Meanwhile, the NBK report said that the investment sector saw KD 113.1 million in sales during June, down KD 22 million compared to last June.

"The decrease in sales was a result of fewer transactions conducted during the month, whereas the average transaction size remained within its normal range. Besides some expected seasonal slowdown, the y/y dip was also due to a "basis effect" -sales in June 2011 were exceptionally high, making this June's sales look relatively softer in comparison. The investment real estate sector should generally do well in 2012," said the report.

The commercial sector saw just KD 5.3 million in sales, a drop of KD 8.5 million compared to the same month of last year.

"Two out of three transactions took place in Kuwait City, with the third being in Hawalli governorate. The low number of transactions and corresponding large variance in their size reflects the volatility of this sector" the report said.
The Savings and Credit Bank (SCB) approved almost KD 10 million in loans, spread out over 159 loan applications (for an average of about KD 63,000). More than half of the approved loans were for the purchase of existing homes, while a little over a third were for new constructions. The SCB also disbursed another KD 12.9 million in loans.

"Expected slowdown due to summer, vacations, and the holy month of Ramadan should become apparent in the coming two months, but the residential and investment segments should support the Kuwaiti real estate sector in having another overall solid year," it concluded.