August 1, 2022 real estate

Kuwait’s real estate market liquidity drops marginally


KUWAIT: The latest data released by the Ministry of Justice -Real Estate Registration and Authentication Department- indicate a slight decline in real estate market liquidity during June 2022 versus May 2022 (excluding the artisanal activity and the coastal strip system), whereby the total value of contracts and Power of attorneys (POAs) decreased by 2.4 percent from May to June, dropping from KD 368.6 million to KD 359.6 million.

Compared to June 2021, liquidity decreased by -8.2 percent from KD 391.9 million. Trading activity during June 2022 was distributed between KD 352.1 million in contracts Value and about KD 7.5 million in POAs value. Number of real estate deals in June scored 645 of which 624 contracts and 21 POAs.

Al-Ahmadi Governorate has the highest share of real estate deals of 48.7 percent, representing 314 deals. Hawally Governorate share is about 17.2 percent, the second highest share, representing 111 deals. Al-Jahra Governorate has the lowest share of 3.6 percent, representing 23 deals. The value of the private residential activity scored KD 186 million, rising by 6.1 percent compared with KD 175.3 million in May 2022, while Its contribution percentage slightly declined to 51.7 percent of total real estate trading versus 47.6 percent in May 2022.

The liquidity domination of the private residential activity is the result of converting residential areas into investment ones. The monthly average trading value of private residential activity in the last 12 months scored KD 217.2 million. June trading value was low by -14.4 percent than the 12- months-average, whereby the number of deals for this activity rose to 477 deals versus 389 deals in May 2022. Accordingly, the average value of private residence activity deal scored KD 389.9 thousand versus KD 450.7 thousand in May 2022, a decrease of -13.5 percent.

The value of residential investments activity increased from KD 102.9 million in May 2022 to KD 123.4 million in June 2022 (19.9 percent increase), in addition to an increase in its contribution to total liquidity (34.3 percent in June versus 27.9 percent in May). The monthly trading average value of residential investments during the last 12 months scored KD 84.8 million, indicating that the trading value during June 2022 was higher by 45.4 percent compared with the last 12 months’ average.

Deals raised to 137 deals compared with 134 deals in May 2022. Therefore, the average value per deal for residential investments scored KD 900.5 thousand versus KD 768 thousand in May 2022, representing an increase of 17.3 percent. Commercial activity trading value decreased to KD 48.1 million, or by -39.2 percent compared with KD 79.1 million in May 2022 its contribution to total real estate trading value drop to 13.4 percent in June versus 21.5 percent in May 2022. The trading average value of commercial activity in June 2022 was 25.8 percent higher than the TTM average of KD 38.3 million, Moreover, 30 deals were counted in June compared with 12 deals in May 2022. The average value per deal for June 2022 scored KD 1.6 million versus KD 6.6 million for May 2022, a -75.7 percent decrease. Moreover, the warehouse activity had one deal amounting to KD 2.2 million in value during June 2022.

When comparing total June 2022 trading with June 2021, we note that real estate markets liquidity decreased from KD 391.9 million to KD 359.6 million, a -8.2 percent decrease as mentioned previously. The drop was driven by the decrease of the commercial activity by – 39.2 percent, and an increase of the private residential activity by 6.1 percent and Residential investments activity by 19.9 percent.

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