March 10, 2023 real estate

Kuwait’s real estate market shrinks

KUWAIT: The latest released data by the Ministry of Justice -Real Estate Registration & Authentications Department- indicates a decreased real estate market activity during February 2023 versus January 2023 (after excluding the crafts activity and the coastal strip system). Total value of traded contracts and power of attorneys (POAs) was at KD 193.9 million in February, a -31.6% decline versus KD 283.6 million in January 2023, and a -37.2% decline versus KD 308.6 million in February 2022.

It seems that the impact of the increase in interest rates has begun to negatively affect the liquidity of the local real estate market, as the monthly average of during the last 12 months (March 2022 – February 2023) was KD 307.5 million, while the monthly average liquidity for the last 3 months (December 2022 – February 2023) was KD 233.8 million, and the possibilities of another rise in the interest rates are still great.

Trading during February 2023 was distributed between KD 187.8 million in contracts and KD 6.1 million in POAs. Number of real estate deals during February reached 359, of which 347 are contracts and 12 are POAs. The highest share in real estate deals went to Ahmadi Governorate with 131 deals representing about 36.5% of the total number of real estate deals. Hawally Governorate came second with 87 deals and representing 24.2% of total deals. The lowest share went to Jahra Governorate with 16 deals, representing 4.5% of the total.

The value of private housing activity reached KD 127.9 million, dropping by -9.6% compared with KD 141.5 million in January 2023. While its share of total real estate activity rose to 66.0% versus 49.9% in January. The 12-monthly average of private housing activity stood at KD 164.3 million. This means that February’s trading value is -22.2% lower than the average. The number of deals for this activity dropped to 258 deals versus 298 deals in January. Accordingly, the value of private residential deals averaged KD 496 thousand versus KD 475 thousand in January, indicating a 4.4% increase.

The value of total investment activities scored KD 60.6 million, decreasing by -33.8% when compared to KD 91.5 million in January 2023. Its contribution to overall real estate trading activity decreased to 31.2% versus 32.3% in January. The trailing-12-months trading average of investment activity scored KD 92.3 million. This means that the average trading value during February was -34.4% lower compared with the 12 months’ average. In addition, the number of deals dropped to 93 compared with 95 deals in January. Therefore, the average value per deal for investment activity scored KD 651 thousand versus KD 963 thousand in January, a decrease by -32.4%.

Commercial activity trading value decreased to KD 5.4 million, or by -88.8% compared with KD 48.3 million in January 2023. Its share out of total real estate trading value decreased to 2.8% compared with 17.0% in January. The Average value of commercial activity trading in the past 12 months scored KD 48 million. This means that trading value in February was -88.7% lower than the 12 months’ average. Its deals totaled 8 compared with exact number for January. The average value per deal for February reached KD 675 thousand versus a KD 6 million average for January, a -88.8% decline.

When comparing total February 2023 trading with February 2022, we note that liquidity in the real estate market decreased from KD 308.6 million to KD 193.9 million, i.e. a -37.2% decrease as mentioned previously. The drop was driven by the decrease of the commercial activity by -88.8% and the investments residential activity by -38.2%, also the decrease in the private residential activity by -21.3%.


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