Local Real Estate Market – August 2019

The latest released data by the Ministry of Justice -Real Estate Registration and Authentications Department- (after excluding the crafts activity and the coastal strip system) indicate a great decrease in real estate market liquidity during August 2019 versus July 2019 liquidity, perhaps due to summer holidays and the weak performance of Boursa Kuwait. Total value of contracts and agencies traded during August scored  KD  144.4  million which was a -66% decrease than its counterpart value in July 2019 which scored KD 425.3 million, while it is higher by 6.5% when compared with August 2018 liquidity that totalled KD 135.6 million.

Trading during August 2019 was distributed between KD 139.9 million to contracts and about KD 4.5 million to agencies. Number of real estate deals in this month scored 331 deals of which 321 contracts and 10 agencies. The highest share in real estate deals went to Al Ahmadi Governorate by 163 deals representing about 49.2% of the total number of real estate deals. Hawally Governorate came second with 55 deals representing 16.6%. While the lowest share went to Al Jahra Governorate by 12 deals, representing about 3.6% of the total.

Value of private residential activity scored  KD  70.3  million,  declining by -57.4% compared with KD 165.1 million in July 2019. While its contribution percentage increased to 48.7% of the total real estate trading versus 38.8% in July 2019.  The monthly average value for private residence trading in the last 12 months scored KD 127.6 million. This means that  August trading value was lower by -44.9% than the average. The number of deals for this activity was at 217 deals versus 498 deals in July 2019. Accordingly, the average value of private residence activity deal registered at KD 324 thousand versus KD 331 thousand  in  July  2019,  a  decrease by -2.2%.

Value of investment housing activity scored   KD   54.2   million,   lower  by  -65.1% from KD 155.4 million in July 2019. Its contribution to total liquidity increased slightly to 37.6% versus 36.5% in July 2019. Monthly trading average value of investment housing activity during 12 months scored KD 119.4 million. This means that trading value during August 2019 was lower by -54.6% compared with the last 12 months’ average. Moreover, its deals decreased to 67 deals compared with 163 deals in July 2019. Therefore, the average value per deal for investment housing scored KD 810 thousand versus KD 953 thousand in July 2019, representing a decrease by -15.1%.

Commercial activity trading value decreased  to  KD  18.4  million  or  by  -82%, compared with KD 102.3 million in July 2019. Its percentage out of total real estate trading value declined to 12.7% in August versus 24% in July 2019. Average value of commercial activity trading in 12 months scored about KD 52.4 million. This means that total trading value in August was lower by -65% than the last 12 months’ average. However, its deals scored 46 deals compared with 73 for July 2019. The average value per deal for August 2019 scored KD 399 thousand versus KD 1.4 million average for July 2019, a -71.5% decrease. Moreover, a single deal occurred for stores activity in August 2019 valued at KD 1.5 million, compared with 2 deals at KD 2.6 million in July 2019.

When comparing total August 2019 trading with August 2018, we note that real estate markets liquidity increased from KD 135.6 million to KD 144.4 million, a 6.5% rise as mentioned previously. The rise included the commercial activity by 143.2% and private residence activity by 8.2%, while investment housing activity declined by -14% compared to their levels in August 2018.

If we compare total trading value since the beginning of the current year until August 2019 with its 2018 counterpart, we note a decrease in total real estate market liquidity from KD 2.298 billion to KD 2.271 billion, a -1.2% decline. If we assume that market liquidity will continue at the same level for the remainder of the year (4 months), market trading value would amount to KD 3.406 billion, which is KD 225.2 million lower than the total for last year, representing a -6.2% decline below 2018 level which scored KD 3.631 billion.