‘More loans given to real estate sector’; Interest rates rise fails to dent demand

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KUWAIT CITY, March 14: According to a survey conducted by Al-Rai daily based on figures issued by the Central Bank of Kuwait, it was discovered that the total credit facilities granted for real estate purposes have taken an upward trend since the beginning of last year despite increasing the interest rates seven times in 2022. The Central Bank raised the discount rate by about 2 percent from 1.5 percent during last March to 3.5 percent in December before raising it for the eighth time by half a point in January 2023, reports Al- Rai daily.

The figures show that the upward tendency of total real estate loans continued throughout last year. It reached about KD 24 billion in January 2022, up by 0.6 percent compared to December 2021 when it reached KD 23.86 billion. It also increased in February by 0.57 percent compared to January, to reach KD 24.212 billion. This upward trend also continued in March, although the first increases by the Central Bank were witnessed in the discount rate by a quarter of a percentage point. The total loans granted for real estate purposes rose by about one percent compared to February to reach KD 24.458 billion, then in April by 0.9 percent to KD 24.68 billion, and in May by 1.15 percent to KD 24.968 billion.

The figure stabilized in June, before rising again in July by 0.72 percent to KD 25.149 billion. In August last year, real estate loans increased to KD 25.211 billion (+0.25 percent), in September (+0.99 percent) to KD 25.462 billion, in October (+0.49 percent) to KD 25.588 billion, and in November (+0.4 percent) to KD 25.687 billion, to end the year 2022 with the level of KD 25.689 billion in December with a slight increase of 0.007 percent. In detail, housing loans (installments) also witnessed an increase in all months of 2022. They increased by about 9.4 percent to KD 15.74 billion at the end of last December compared to KD 14.39 billion at the end of 2021, and by about 23 percent compared to the end of 2020 when it was KD 12.71 billion.

As for the facilities granted to private and model housing during the past year, they increased by about 0.99 percent to KD 326.1 million, compared to KD 322.9 million at the end of 2021. They increased by about 4.25 percent (KD 13.3 million) compared to their level at the end of 2020 when they reached KD 312.8 million. As for the facilities granted to the real estate sector, they increased by about KD 468 million (+5.1 percent) last year to KD 9.622 billion, compared to KD 9.154 billion recorded at the end of December 2021. It also witnessed an increase of KD 564 million (+6.22 percent) when compared to its level at the end of 2020 amounting to KD 9.058 billion

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