Real Estate transactions continue to plummet in first half of 2023

KUWAIT: Prices of real estate transactions have been on a steady downward slope since the first half of 2022, as per Ministry of Justice data. The decline is accompanied by a price rate hike especially within Assima and Hawally governorates. The first half of this current year marked a sharp 41 percent plunge in the number of transactions within the residential sector, which refers to housing owned and occupied by Kuwaitis, with 1,526 deals struck (total value of KD 736 million) compared to 2,592 in the same period last year (total value of KD 1.75 billion).

Mohammad Al-Sughair

Despite this obvious decline in the number of deals, the average value of a single deal increased to KD 483,000 per deal from KD 414,000 in 2022, a 16.6 increase, this speaks to private residence price increases namely within Assima and Hawally while prices in other governorates remain intact. The investments sector, which refers to real estate owned by Kuwaitis but turned into apartments for rent, was also subject to decrease as 589 deals were registered in first half of 2023 compared to 687 deals in the first half of the previous year, marking a 14.2 percent decrease.

However, unlike the residential sector, average value of single transaction within investments sector declined by 9.8 percent from KD 854,000 per deal last year to KD 770,000 this year. Data shows that the commercial sector plummeted by 74 percent from 111 deals in first half of 2022 to only 39 deals first half of this current year, whereas average value of single deal shot up from KD 3.513 million to more than KD 5 million. Commenting on the real estate market, expert Mohammad Al-Sughair attributed decrease in transactions to the dwindling number of offers and new land plots, this very same reason contributes to the increase of prices.

Ahmad Al-Nabhan

Chair of a real estate company Ahmad Al-Nabhan spoke of the increasing interest rate on Kuwaiti dinar saying this drove brokers in the private residents sector to revert to local bank trusts rather than invest in residential houses and flipping them to apartments for rent. Nabhan also spoke about the investments sector in areas further away from the capital, within Al-Ahmadi and Farwaniya governorates, saying that decrease in these areas could be linked to recent government decision relating to visas.

As for forecast for upcoming six months, Nabhan reported blurry vision with most investors and observes awaiting whether The American Federal Reserve continues to increase interest rate. Nabhan stated that the Kuwaiti market could rejuvenate if American interest rate seizes to increase in second quarter of 2024 prompting decrease in local interest rate, thus causing bank trusts to loner appeal to investors and driving them back to the more robust markets of real estate or the stock exchange. – KUNA

The post Real Estate transactions continue to plummet in first half of 2023 appeared first on Kuwait Times.

Leave a Reply

Your email address will not be published. Required fields are marked *

× Contact us for news, article submissions, and SEO services.