Real estate sales activity continued to decline during May, falling to its second weakest level in five months. A total of 314 sales transactions were registered at a value of KD 80.1 million. National Bank of Kuwait reports that, sales volume fell 17% from the previous month. The residential sector saw moderate growth with value and number of transactions rising by 3% and 7% respectively. NBK noted the drop in May sales values came largely from a decrease in commercial sales, which saw a 66% decline.
In May, three suburbs that are among the most active markets for vacant plots — Abu Futaira, Ishbilia and Funaitees — continued to attract buyers and real estate investors. Vacant plots in these areas alone accounted for 17% of all residential property sold during the month. Meanwhile, average transaction sizes during the month were up 8% for apartments, while residential and commercial property fell by 4% and 24%, respectively. NBK reported that average real estate sales during the first five months of 2009 dropped by 55% in value and 49% in number compared with the same period last year. Most of the decline in sales value occurred in the apartments sector, where sales values dropped by 63%. The residential and commercial sectors were not spared, with sales values down by 57% and 14%, respectively.
In May, approved loans by the Savings and Credit Bank (SCB) were down by 26% and 29% (m-o-m) in number and value, respectively, to their lowest levels since April 2008. The SCB approved 340 loans with a value of KD 12.5 million. Compared with April, approved loans for construction of new homes and for purchase of existing homes fell by 37% and 15%, respectively. However, for the first five months of 2009, the KD volume of approved loans was up by 96% from the comparable period in 2008 (driven by the last distribution of land plots). Meanwhile, the SCB disbursed KD 13.7 million in loans during May, 9% lower than the previous month, though the five-month average was ahead by 11% compared to the previous year.