This post has been read 4558 times!
Activity in the residential sector was strong while the investment and commercial sectors fell behind. Overall activity improved as the number of transactions rose 6.5% to 4,524. However, sales decreased again in 2017 but a slower rate (6.9%; to KD 2.2 billion) than in the past two years. While residential activity grew by 22%, sales in the investment and commercial sectors fell 19% and 37%, respectively. The real estate market benefited from some optimism during the year as oil prices improved. The year also saw a stable consumer sector which may have provided some impetus to the residential property market.
Real estate sales were up slightly in December, but compared unfavorably to strong figures reported a year ago. Sales rose to KD 171.4 million in December, but were down 40.5% year-on-year (y/y) mostly as the commercial sector posted much weaker numbers compared to the prior year.
Residential sector sales were stable in December 2017 as prices continued to improve. Though the number of transactions in the sector was down 10% y/y in December 2017 (to 246 from an average of 280 for the year), sales activity grew by 1% y/y in terms of value, to KD 82.3 million.
Prices increased in the residential real estate completed 2017, especially in the residential home sector. The NBK Residential Home price index posted positive annual growth for the first time in two years, rising 0.2% y/y to reach 152.2. The Residential Land Index declined 3.4% y/y, but compared to the 2017 overall, the pace of decline has eased.
Investment property sales were lackluster in December. Contracts in the month amounted to KD 39.1 million, down 39% y/y and marking the ninth month of negative annual growth in 2017. Transactions also slowed to 76, down 22% y/y. Two-thirds of the transactions were apartment units located predominantly in Mahboula and Bneid Al-Gar.
The investment sector prices improved in December, but declined compared to last year. The index reached 183.6 in December 2017, rising 1.2% m/m, but remained down 3.4% y/y. The index appeared to stabilize in 2017, notwithstanding a temporary dip in the 3Q17 which was reversed in 4Q17.
Commercial sector activity picked up pace after a slow November, but was well below levels recorded during a period of strength a year ago. December saw just one commercial transaction; a building in Salmiya sold for KD 50 million. Sales were down 65% y/y.