real estate trading developments march 2019 economic ... · real estate sales, thus aiming to...

KFH Data Classification: Internal Use Only

Strategic Studies, Reports and Corporate Relations

Kuwait Finance House of 17

Real Estate Trading Developments

March 2019

Economic Reports – Group Strategy and Corporate Relations

Kuwait Finance House




This report covers monthly real estate trading developments. It incorporates analysis of

all types and levels of trading: private, investment, commercial, storage as well as total

real estate sales, thus aiming to monitor periodical changes in local real estate market.

Real estate Sales and Average Transaction Value

Real estate sales witnessed a slight decline in March, thus reaching KD 289 Million i.e. a

decline by 1.4% compared to February. This decline is driven by the major decline in the

commercial sector sales. Meanwhile, residential and investment sectors have recorded a

remarkable monthly increase as sales in March have for exceeded sales recorded for the last

two years. Real estate sales have increased significantly in March, thus reaching the highest

level in 2 years and recording 624 transactions with a monthly increase by 32% accompanied

by an increase in sales in the investment and residential sectors and a remarkable stability in

the trade sector sales.

Real estate sales value recorded a significant decline in March on annual basis by 23% despite

the limited increase in the number of transactions by 2.3% in March, driven by the significant

annual decline in the number of transactions in both trade and investment sectors. The number

of transactions increased significantly in residential sector, thus reflecting negatively on the

number of transactions in these sectors where value declined significantly in both investment

and trade sectors while it increased in the private residence sector on annual basis.

Average transaction value index declined by 25% in March on monthly basis. Accordingly,

the decline reached 25% on annual basis. Average transaction value index in investment

sector declined slightly while the trade sector declined significantly. Average transactions

value witnessed a limited increase in the residential sector and doubled in the handcraft sector

4x the value in February exceeding KD 2 Million. This performance has reflected on the index

value compared to last year as the residential sector recorded a limited annual increase while

the average value index declined in both investment and trade sectors.




Sales value increased in most of the real estate sectors in March. The value increased in

private residence sector by 45% value wise and increased in number by 37%. Accordingly,

average transaction value in this sector increased by 6% on monthly basis. Investment sector

sales value increased by 11.5% in value and 14% in number. Nevertheless, the average

transaction value declined on monthly basis in this sector by 2%. Sales value in trade sector

declined by 74%. However, the number of transactions in this sector did not witness any

change compared to February. Accordingly, average transaction value declined by y4% on

monthly basis. On annual basis, average transaction value increased in the residential sector

by 8%, declined in the investment sector by 12% and declined in the trade sector by 51% on

annual basis.

Gross Real Estate Sales

Real estate sales value reached KD 289 Million at the end of March, thus maintaining a level

higher that the sales level recorded during the last two years. Sales value declined slightly by

1.4% compared to value in February which has exceeded KD 293 Million. The sales value

has taken the escalating trajectory since reaching its lowest levels in 2015. Despite the

significant increase in the sales of the residential and investment sectors and the significant

sales recorded by the handcraft sector yet the trade sector recorded a higher decline which has

relatively contributed to the decline in the real estate sales value. It is noticed for the second

time respectively this year that sales were recorded on the coastal strip sector. However, these

sales were not reflected in the annual real estate sales which have declined by 23% compared

to its highest levels when they exceeded KD 373 Million in March last year.




Average daily real estate value index recorded KD 13.8 Million per day in March i.e. a limited

decline by KD 1 Million or 6.1% compared to KD 14.7 Million per day in February. The

number of trading days has stabilized at 20 days during March and February due to holidays

and national festivals. Daily average transaction value index declined in March by 23%

compared to KD 17.8 Million for the same month 2018.

Distribution of Sales based on Contracts and Agencies

Real estate sales (contracts) approximated KD 275 Million in March i.e. a decline by 5%

compared to KD 289 Million in February and declined by 24% on annual basis. Sales value

(agencies) increased to reach KD 14 Million in March i.e. an increase by 209% on monthly

basis and 42% on annual basis.

Distribution of Real estate sales and market share based on Real estate type

Private residence sales share has increased, thus regaining its first rank for the third month

respectively. It represents the highest share since the beginning last year by 57% of real estate

sales for the month of March. The general trend of this index commenced its escalating

trajectory after reaching its lowest levels 26% of sales in July last year.

Investment real estate sales contribution reached 28.5% in March compared to 25% in

February. This sector comes in second rank among real estate sectors for the third time

25

9.2

14

0.5

34

0.6

16

3.5

20

0.5

18

8.1

14

7.7

21

8.3

14

9.4

17

4.6

22

9.4

19

9.0

36

3.3

49

.8

7.2

29

.4

14

.1 26

.9

5.1

19

.0

7.8

18

.5

13

.0 16

.3

13

.9

9.8

0

50

100

150

200

250

300

350

400

Mar2017

Apr. May Jun Jul Aug Sep. Oct Nov Dec2017

Jan2018

Feb Mar2018

Agencies

Development on Gross Real estate Sales Value

KD Million

Source: Real estate Registration and Authentication – Ministry of Justice, KFH




respectively. The share of this sector has declined after a long period of high contribution last

year, thus exceeding 41% in March last year.

Trade sector sales formed 9.2% of all sector sales in March compared to an exceptional share

34.5% in February. Trade sector share in total real estate sales is still fluctuating.

Handcraft real estate sector sales share increased significantly to a high level representing

5.2% of sales in March compared to 0.25% of total sales in February. March has witnessed a

slight contribution of coastal strip sector sales for the second month respectively representing

1.6% of sales in February.

Average Transaction Value

Average real estate transaction value reached KD 463 Thousand in March, thus reaching its

lowest levels. The index ascending trend has slowed down because of the significant monthly

decline by 25% compared to one of the highest levels when it recorded KD 622 Thousand in

February. Monthly change ratio of average transaction value is still fluctuating. Average

transaction value has declined by 24% compared to March last year. a fluctuating escalating

trajectory is noticed on the annual change of the average real estate transaction value.

0%

10%

20%

30%

40%

50%

60%

70%

80%

Mar2017


Jan2018

Feb Mar2018

Private Residence Investment Commercial

Development on Relative Weight of VariousReal estate Sales Value

Private Residence

32%

Investment

42%

Commercial23%

Warehouses and Handcrafts

3%

Real estate Sales Share Sector wise Mar. 2019





Total real estate transactions reached 624 transactions in March (593 contracts – 31 Agencies)

which is a high level compared to most of the months during the last two years. Accordingly,

the number of transactions has increased by 2.3% on annual basis. There is a clear fluctuation

in the annual change ratio of the number of real estate transactions during the last few months.

Average transactions increased to reach 30 transactions per day during March i.e. an increase

by 26% compared to 20 transactions per day in February. Also, it increased by 2.3% on annual

basis compared to average number per day in March 2018.

Distribution of Real estate Sales Governorate wise

Sales value in Ahmadi governorate reached KD 38.2 Million which represents 12% of the

value of all governorates sales in March 2019, consolidated on weekly basis. This recorded

49

8

39

5 51

9

39

8

51

0

56

5

44

8

45

2

49

5

52

1

60

1

57

8

61

2

-7%

-34

%

9%

-22

%

2%

15

%

-4%

8%

-18

%

-28

%

18

%

32

%

23

%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

0

100

200

300

400

500

600

700

Mar2017


Jan2018

Feb Mar2018

Transaction Average ValueAnnual Growth -Right

Average Transaction Value

KD Thousand

44

1

35

7

63

0

38

7

38

9

33

1

31

8 47

7

30

4

32

7

38

2

35

2

58

1

17

9

17

83

59 57

11

54

23

35 3

3 27 16

29

0

100

200

300

400

500

600

700

800

Mar2017


Jan2018

Feb Mar2018

AgenciesContracts

Development on total real estate transaction

Transaction





value comes along with a remarkable increase in the number of transactions to reach 147

transactions representing 24% of the number of all governorate transactions in March.

Sales value in capital governorate reached KD 48.3 Million reprssenting 17% of monthly

sales. The number of transactions reached 61 transactions representing 10% of the number of

transactions in March.

Sales value in Hawalli governorate reached KD 80.45 representing 28% of the value of all

governorate sales in March while the number of transactions reached 116 transactions in

December, representing 20% of the number of transactions in March.

Sales value in Mubarak Al-Kabeer governorate reached KD 52.5 Million representing 18%

of the value of all governorate sales. The number of transactions reached 169 transactions

representing 25% of all transactions.

Sales value in Farwaniya governorate reached KD 60 Million representing 21% of the value

of sales in March. The number of transactions reached 78 transactions representing 13% of

all transactions.

Sales value in Jahraa governorate reached KD 9.6 Million representing 3% of the value of all

governorate sales in March. The number of transactions reached 14 transactions representing

2% of the real estate transactions in March as consolidated on weekly basis.




Private Residence Sales Value

Private residence sales value increased to reach KD 164 Million representing the second

highest level in 4 years following the exceptional value recorded in March 2017. Sales have

has taken an escalating trajectory since mid-2015, thus recording in March 2019 a significant

monthly increase by 45%. However, sales value is still witnessing monthly fluctuations. The

robust monthly performance has contributed to the achievement of an annual significant

increase by 35%. Annual change ratio in sector sales has fluctuated even though it has taken

the escalating trajectory.


Average transaction value indicator of private residence recorded KD 333 Thousand, which

is the highest level reached in one year. This index has taken the escalating trajectory during

the said period as it recorded a monthly increase by 6% compared to KD 315 Thousand in

February. Change ratio is continuing to fluctuate on monthly basis. Meanwhile, average

transaction value in this sector increased by 8% on annual basis in March. This increase comes

despite the annual decline in most of the months last year with a continued fluctuation of

annual change.

17

5.5

81

.7

13

8.2

10

2.0

90

.3

67

.2

68

.3

11

0.3

83

.0

82

.3

84

.5

97

.1

11

3.7

36

.4

7.2

25

.6

13

.0

11

.6

3.7

17

.5 6

.6

13

.9

9.5

6.9

4.9

7.3

0

50

100

150

200

250

Mar2017


Jan2018

Feb Mar2018

AgenciesContracts

Development on private residence sales value

KD Million




Private residence sale transactions increased to reach 492 transactions in March, reaching the

highest level in 4 years (464 contracts and 28 agencies) i.e. an increase by 37% compared to

359 transactions in February. Transactions number has taken the escalating trajectory in this

sector despite the continued fluctuati9ons in the monthly change ratios. The number of

transactions in this sector increased by 25% in March on annual basis accompanied by a

strong escalating trajectory of the annual change ratios for this sector and the residential

sector.

Distribution of Private Residence Sales Governorate wise

Private residence sales value, consolidated on weekly basis, was concentrated in certain

governorates during March. Mubarak Al-Kabeer governorate has recorded the highest value,

followed by Hawalli, Capital, Ahmadi governorates and finally Farwaniya and Jahra

40

1

29

1

33

7

31

4

32

1

31

2

33

1

30

9

36

0

33

4

30

1

35

1

30

7

28

%

-8%

-18

%

-5%

1%

-8% -4

% -2%

24

%

9%

-7%

3%

-30%

-20%

-10%

0%

10%

20%

30%

050

100150200250300350400450

Mar2017


Jan2018

Feb Mar2018

Transaction Average Value Annual Growth -Right

Development on average private residence transaction value

KD Thousand

35

8

28

8 40

6

30

8

26

8

21

7

20

7 35

7

23

6

24

6

28

3

27

8 36

7

17

0

17

80

58

49

10

52

21

33 2

9

21 12

27

0

100

200

300

400

500

600

Mar2017


Jan2018

Feb Mar2018

AgenciesContracts

Development on private residence transactions

Transaction

Source: KFH, Real estate

Registration and

Authentication –

Ministry of Justice

Source: KFH, Real estate Registration and Authentication – Ministry of Justice




governroates. Private residence sales value in Mubarak Al-Kabeer governorate approximated

KD 45.2 Million which represents approximately 30% of the private residence sales in all

governorates. The sales value was focused in certain areas e.g. Masayel KD 25 Million,

Funaitees KD 8.7 Million, Abu Fatira KD 6.3 Million and Sabah Al-Salem by KD 2.8 Million.

Private residence sales value in Hawalli governorate reached KD 33.3 Million which

represents 22% of the private residence sales in March. The sales were mainly focused in

Salwa area KD 6.7 Million, Jabriya KD 3.7 Million, Rawda and Mishrif with approximately

similarly value and finally Salam area KD 3.3 Million.

Sales value in Capital governorate reached KD 27.6 Million representing 18% of the value of

all governorate sales. Sales value was mainly focused in certain areas e.g. Abdullah Al-Salem

KD 4 Million, Rawda KD 3.7 Million, Qadsiya KD 2.8 Million, Keefan and Yarmouk KD

2.4 Million and KD 2.2 Million respectively.

Sales value in Ahmadi Governorate exceeded KD 25.4 Million, consolidated on weekly basis,

representing 17 % of the value of sales in all governorates. Sales were mainly focused in

certain areas where highest value was recorded in Sabah Al-Ahmed Marine and Residential

area KD 10.9 Million followed by Eqaila KD 4.9 Million and Mangaf KD 1.4 Million.

Investment Real-estate Sales Value

Investment real estate sales value increased in March to reach KD 82 Million i.e. an increase

by 11.5% compared to February which has declined significantly by 23%. Accordingly, the

general trend of the sales value has taken the descending trend during the last 1.5 years. Sale

levels are still limited in this sector while fluctuations continue in the monthly change ratios.

Sector sales have witnessed an annual decline ratio for the third year respectively i.e. a decline

by 48% in March although the annual change has enhanced the escalating trajectory in late

2018. Hence, the change is still fluctuating.




Average transaction value index in investment real estate sector was relatively limited in

March, accompanied by a slight monthly decline as it recorded KD 730 Thousand in March

i.e. a decline by 2% compared to KD 747 Thousand in February. The escalating trajectory of

this index has continued strongly for the last two years while the monthly change ratio of

transaction value has fluctuated significantly in this sector. On annual basis, average

transaction value declined in this sector by 12% in March bearing in mind it is the third decline

respectively.

Investment real estate transactions increased to reach 113 transactions (112 contracts – 1

agency transactions), thus reaching a high level compared to most of the months during the

last two years. This is the first increase recorded following the significant decline witnessed

during two consecutive months. Transactions increased by 14% in March compared to a

decline by 20% and more than 37% in February and January this year respectively. The

number of transactions in investment sector has taken the escalating trajectory since the

59

.8

42

.4

87

.7

49

.4

57

.5

34

.8

68

.2

60

.1

38

.5

39

.1 1

22

.2

80

.1 1

54

.7

12

.8

-

3.9

1.2

15

.3

1.4

1.5

-

3.1

1.5

9.4

9.0

2.5

0

50

100

150

200

Mar2017


Jan2018

Feb Mar2018

Agencies

Development on investment real estate sales value KD Million

89

6

70

6

50

0

67

4

67

4

52

5

81

0

57

3

68

1

52

8

1,4

15

1,2

73

83

2

17

%

23

%

22

%

-11

%

-4%

-28

%

88

%

0% 10

%

-21

%

14

3% 1

73

%

-7%

-50%

0%

50%

100%

150%

200%

0

200

400

600

800

1,000

1,200

1,400

1,600

Mar2017


Jan2018

Feb Mar2018


Development on Average Investment Real estate Transaction Value

KD Thousand






beginning of the year accompanied by a fluctuating monthly change of this index. Meanwhile,

the number of transactions declined on annual basis by 40% in this sector for the first time in

one year.

Distribution of Investment Real-estate Sales Governorate Wise

Investment real estate sales, consolidated on weekly basis, are focused were focused in certain

governorates in March. Hawalli governorate recorded the highest value, followed by

Farwania, Mubarak Al-Kabeer, and capital governorates. Jahra governorate is still recording

the lowest transaction value.

Hawalli governorate recorded KD 38.2 Million in March, representing 46% of sales in all

governorates. Sales value was focused in Salmiya KD 28.3 Million, Hawalli KD 9.8 Million

and minor sales in Shaab by KD 130 Thousand.

Sales value in Farwania approximated KD 19.9 Million for investment real estate,

representing 24% of all governorates sales. Sales were focused mainly in Farwania

governorate KD 9.6 Million, Khaitan and Abraq Khaitan KD 4.6 Million. Sales value in Riqae

exceeded KD 3.6 Million representing the value of several buildings of 1000 sm. areas. sales

value in Jaleeb Al-Shoyoukh area approximated KD 1 Million.

Sales value, consolidated on weekly basis, exceeded KD 12.8 Million in Ahmadi governorate,

representing 16% of investment real estate sales in March. Sales were mainly focused in

73

60

18

0

74 1

00

68 8

4 10

5

60 7

6 87

66

18

7

8

0

3

1

8

1

2

1

1 6

4

2

0

20

40

60

80

100

120

140

160

180

200

Mar2017


Jan2018

Feb Mar2018

Agencies

Contracts

Development on Investment real estate transactions

Transaction





Mahboula area KD 5.1 Million including two pieces of investment land KD 2.4 Million. Sales

in Mangaf were focused in investment apartments and buildings by more than KD 2.9 Million

followed by investment apartments in Fahaheel area KD 1.7 Million, Fintas KD 1.6 Million

and Abu-Halifa KD 1.5 Million in March.

Sales value in Mubarak Al-Kabeer governorate reached KD 4.7 Million, representing 6% of

all governorates sales. Sales were mainly focused in Sabah Al-Salem area KD 4.4 Million

covering 4 pieces of land.

Sales in Capital governorate reached KD 4.5 Million representing 5% of all governorate sales.

Sales were mainly focused in Benaid Al-Qar covering investment apartments and houses KD

2.8 Million in addition to an investment land KD 1.5 Million. Sharq area witnessed limited

sales covering investment apartments.

Commercial Rea estate Transactions Value

Commercial real estate sector sales reached KD 27 Million i.e. a decline by 74% compared

to the highest level recorded in February KD 101 Million. Monthly change fluctuations

continue for sales in the commercial sector. Fluctuation was also noticed remarkably in the

sales value and the annual change ratios of the sales value in this sector. Value has declined

in March by 68% compared to March 2018.

20

.0

12

.7

62

.8

10

.9

13

.8

52

.5

7.5

46

.5

25

.8 50

.0

16

.2

11

.3

84

.5

0

10

20

30

40

50

60

70

80

90

Mar2017


Jan2018

Feb Mar2018

Agencies

Contracts

Development on Commercial Real estate Sales Value

KD Million





Average transaction value reached KD 2.4 Million in March i.e. a monthly decline by 74%

compared to the highest level reached in February KD 9.2 Million. This index has witnessed

a fluctuating trend since the beginning of last year. On annual basis, average transaction value

has declined in March by 51% compared to March last year. fluctuation in annual change was

clearly noticed in this index.

Commercial real estate transactions reached 11 transactions in March compared to February,

thus stabilizing at high levels for the third time respectively compared to most of the months

during the last two years. Fluctuation is noticed clearly in the number of commercial sector

transactions which has still taken the escalating trajectory. Monthly change in the number of

transactions was clearly noticed since the beginning of 2018. The number of transactions in

this sector declined in March by more than 35% compared to the same month 2018.

4,0

00

4,2

40

10

,47

1

2,7

13

3,4

44

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7,5

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50

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67

4,9

71

-2%

-23

%

17

4%

-55

% -16

%

27

%

16

1%

29

7%

-44

%

32

1%

23

%

-31

% 24

%

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

350%

0

10,000

20,000

30,000

40,000

50,000

60,000

Mar2017


Jan2018

Feb Mar2018


Development Transaction value/ commercial real estate sales

KD Thousand

5

3

6

4 4

15

1

7

5

1

5 5

17

0

5

10

15

20

Mar2017


Jan2018

Feb Mar2018

Agencies

Development on commercial real estate transactions No.

Transaction


Source: KFH, Real

estate Registration and

Authentication –

Ministry of Justice




Commercial sector sales were focused in certain governorates e.g. Capital governorate

KD 16.3 Million which is the highest among all governorates. sales were focused in

city area including a building under construction for KD 5 Million, a building in Sharq

for KD 4.8 Million, Qibla KD 4.8 Million and in Salhia KD 1.7 Million being the value

of a commercial land. Sales value in Hawalli governorate reached KD 7.9 Million

including a building in Salmia KD 5.1 Million and a mall in Hawalli KD 2.8 Million.

Farwania governorate recorded KD 9.5 Million sales including a mall in Khaitan for

KD 6 Million and a huilding in Farwania for KD 3.6 Million. Sales in Jahra governorate

recorded KD 4.9 Million as the value of two malls in Jahra area in March this year.

Warehouses and Handcraft Real Estate Transactions Value

Handcraft real estate sales value increased to reach its third highest level in 2 years, thus

exceeding KD 15 Million in March compared to KD 150 Thousand in February. Sales value

in this sector has fluctuated although it has taken the escalating trajectory during the last two

years. Monthly change ratios of sales have also fluctuated as they sales value in the handcraft

sector has increased by 45% compared to March 2018. Sales value has also witnessed an

annual change fluctuation.

Average handcraft real estate transaction value increased to reach its third highest value in 3

years, thus recording in March KD 2.2 Million i.e. 4x the level recorded in February KD 510

Thousand. The index maintained its clear escalating trajectory while monthly change ratio

3.9

3.7

51

.9

1.3

25

.1

33

.5

3.7

1.4

2.2

3.2

6.4

4.5

10

.4 0.7

1.2

1.5

2.0

0

10

20

30

40

50

60

Mar2017


Jan2018

Feb Mar2018

AgenciesContracts

Development on Warehouses and Handcrafts Sale Value

KD Million





has continued its fluctuation. On annual basis, average transaction value increased compared

to a relatively high level which has exceeded KD 1 Million in March last year.

Handcraft real estate transaction number increased to reach 7 transactions in March compared

to 1 transactions in February. However, the number of transactions in March 2019 has

declined by 30% compared to the number in March last year. sales in this sector were mainly

focused in 2 governorates. sales in Farwania governorate reached KD 12.6 Million covering

3 pieces of land allocated for commercial showrooms, Abraq Khaitan KD 11 Million and

Ardiya Handcraft area KD 1.8 Million. Sales in Mubarak Al-Kabeer reached KD 2.5 Million

covering the value of 2 pieces of land in west Abu-Fatira area in March 2019.

75

5

61

8 1,3

66

1,3

00

1,5

68

1,0

82

14

4

26

4 91

3

74

0

92

0

2,2

25

1,0

42

22

%

-31

%

13

6%

11

7%

12

6%

11

%

-93

%

-74

% -37

%

0%

28

%

24

2%

38

%

-150%-100%-50%0%50%100%150%200%250%300%

0

500

1,000

1,500

2,000

2,500

Mar2017


Jan2018

Feb Mar2018


Development on Average Warehouses and Handcraft Transaction

KD Thousand

5 6

38

1

16

31

26

8

3 4 7

2

10

1

2

1

3

0

5

10

15

20

25

30

35

40

Mar2017


Jan2018

Feb Mar2018

Agencies Contracts

Development on Total Handcraft & Warehouses Transactions

Transaction






Coast Strip Transactions

The data has recorded certain transactions on this type of real estate, exceeding KD 1 Million

which covers the value of the piece of land on the coastal strip in Rumaithiya in March.

Recorded value reached KD 4.6 Million including KD 4.5 Million for restaurants and coffee

shop in Salwa area and KD 90 Thousand as the value of a piece of land in Masayel area in

February 2019.

real estate trading developments march 2019 economic ... · real estate sales, thus aiming to...

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