KUWAIT CITY, Sept 19: Local banks have significantly increased their financing to Kuwait’s real estate sector, with loans reaching a total of 10 billion dinars in July, up from 9.949 billion dinars the previous month. This represents a 1.1 percent monthly increase and a 4.5 percent annual rise from the 9.625 billion dinars recorded in July 2023. In the first seven months of the year, banks extended approximately 3.7 billion dinars in credit to the real estate sector. Interestingly, real estate financing surged by 125.1 million dinars, or 23.8 percent, in July alone, reaching 649.6 million dinars compared to 524.5 million dinars in June.

Yearly, financing in July increased by 303.2 million dinars, or 87.5 percent, from 346.4 million dinars in July 2023. The real estate activity was also robust last month, with 448 properties traded for a total value of 359.07 million dinars (about $1.2 billion). The private real estate transactions led with 321 properties valued at 153 million dinars, followed by investment real estate with 105 properties worth 62.105 million dinars. Other transactions included 11 commercial properties for 9.65 million dinars, five craft real estate contracts for 6.1 million dinars, and three exhibition sector properties valued at 28 million dinars.

Additionally, transactions in the warehouse sector and coastal strip were valued at 2.5 million dinars and 6.15 million dinars, respectively. This uptick in both financing and transactions reflects a growing confidence and active engagement in Kuwait’s real estate market. The data from the Central Bank of Kuwait reveals a notable increase in consumer loans and deposits over the first seven months of 2024. By the end of July, consumer loans had risen by 59 million dinars, or 3 percent, reaching a total of 2.03 billion dinars.

This compares to 1.97 billion dinars at the end of December 2023. During this period, the total volume of loans granted by Kuwaiti banks amounted to 1.82 billion dinars, marking a 3.4 percent increase. Consequently, the overall credit extended in Kuwait grew to 55.37 billion dinars by the end of July, up from 53.55 billion dinars at the end of 2023. The rise in loan volumes is attributed to broader credit expansion across various economic sectors. Housing loans, which are long-term personal loans for purchasing, building, or renovating residential properties, totaled 16.24 billion dinars by July’s end. This reflects an increase of 230 million dinars, or 1.42 percent, from the 16.01 billion dinars recorded at the end of December 2023. Personal facilities also saw growth, with the total balance reaching 19.01 billion dinars, up by 250 million dinars or 1.35 percent from 18.76 billion dinars. In terms of deposits, Kuwaiti banks saw a rise in total deposits to 49.48 billion dinars as of July, an increase of 755 million dinars or 1.55 percent from the 48.72 billion dinars recorded at the end of 2023. This growth was driven primarily by an increase in private sector deposits, which grew by 2.58 percent to 36.53 billion dinars, reflecting a rise of 1.01 billion dinars.

Deposits in foreign currencies also increased slightly, reaching 1.83 billion dinars, up 1.04 percent from 1.81 billion dinars at the end of 2023. Conversely, deposits from public financial and non-financial institutions decreased by 11.5 percent, falling to 5.98 billion dinars from 6.76 billion dinars at the end of December 2023. Overall, the data indicates a robust expansion in both consumer loans and deposits, underscoring a dynamic financial environment in Kuwait during the first half of 2024. The Central Bank of Kuwait’s latest data reveals a significant increase in government deposits over the first seven months of 2024. By the end of July, government deposits had risen to 5.13 billion dinars, up from 4.63 billion dinars at the end of December 2023. This represents a substantial growth rate of 10.77 percent, amounting to an increase of 499 million dinars. This notable rise in government deposits reflects a strong improvement in the financial position of the government and may indicate increased revenue streams or more effective fiscal management during the early part of the year

By Mahmoud Shendi
Al-Seyassah/Arab Times Staff