KUWAIT CITY, July 15: It seems that Kuwait’s real estate market is still witnessing a state of stagnation. This is evident from the continued decline in the number of real estate deals and their value during the second quarter of 2023. The economic crisis and the ensuing inflation and rise in the interest rates played a major role in this decline, in addition to the uncertainty in housing reforms that are yet to see the light, reports Al-Qabas daily.

In a recent study, Al-Hesbah Real Estate Company highlighted the latest developments in the sector in terms of estimated market values of real estate, average rental prices, occupancy rates and annual returns for various real estate sectors. According to the study, the private housing sector witnessed a decrease in the number of deals by about 34.7 percent in the second quarter of 2023 with 487 deals, compared to 746 deals during the same period in 2022.

Their value amounted to KD 262.8 million in the second quarter of 2023 compared to KD 376.7 million in the second quarter of 2022, which is a decrease of 30.2 percent on an annual basis. The marine city of Sabah Al-Ahmad and the coastal strip were excluded in this study. According to the study, investment housing (buildings and land) deals declined significantly by about 52.2 percent, recording only 65 deals in the second quarter of 2023 compared to 136 deals in the same period of 2022.

The value amounted to KD 121.2 million in the second quarter of 2023 compared to KD 249.2 million in the second quarter of 2022, which is a decline of 51.3 percent. Units and apartments sold and shops within the investment property were excluded. Regarding commercial real estate, which also includes craftsmanship, recreational activity, stores and car showrooms, it recorded a sharp decline in the number of deals by about 81.7 percent. It recorded only 19 deals in the second quarter of 2023 compared to 104 deals in the same period of 2022. The value of these deals was KD 94.1 million in the second quarter of 2023, compared to KD 294.07 million in the second quarter of 2022, which was a decrease of 68 percent. It is noteworthy that all the mentioned real estate transactions were completed with a 100 percent sale rate.

Market value
The study revealed the estimated market value of space private housing lands that are located in areas close to the capital on an area of 500 square meters. Shuwaikh Residential topped the list of the ten most expensive residential areas near the capital at a price of KD 1.17 million. In second place came the suburb of Abdullah Al-Salem at a price of KD 965,000, followed by Nuzha in third place with KD 905,000, and then Adailiya in fourth with about KD 845,000. Shamiya came in fifth place with a price of KD 800,000 for a plot, Khalidiyah in sixth with a price of KD 710,000 and Faiha in seventh with about KD 690,000. Mansouriya, Kaifan and Rawda ranked eighth, ninth and tenth with prices of KD 670,000, KD 650,000 and KD 635,000 respectively. In a selected sample from the various governorates of Kuwait, the study revealed that the estimated market value of plots in investment properties on an area of 750 square meters during the second quarter of 2023 reached about KD 1.8 million in Kuwait City.

It was KD 1.02 million in Salmiya, about KD 1.05 million in Sabah Al-Salem area, and about KD 885,000 in Fahaheel area. As for Farwaniya and Jahra areas, the price of a plot of land amounted to about KD 900,000. The annual return of the real estate sectors in the country varied during the second quarter of 2023 according to the location and area. In the investment housing sector, it ranged between 6.75 percent and 8 percent. In the commercial sector, it ranged between 6.25 percent and 8.50 percent. The returns of the craft and industrial sector were higher, as it varied between 7.25 percent and 10 percent.

The average rent of apartments with an area of 60-65 square meters in the Capital Governorate, specifically in Kuwait City, as of the end of the second quarter of 2023 was KD 310. As for the Hawally Governorate, the average rent was KD 290 in Salmiya area, KD 270 in Hawally area, and KD 310 in Jabriya area. It reached KD 290 in Sabah Al-Salem area within the Mubarak Al-Kabeer Governorate. In Ahmadi Governorate, the average rent of apartments was KD 260 in Fahaheel area, KD 240 in Mangaf area, and KD 210 in Mahboula area. The average rental value was KD 270 in Farwaniya and Khaitan areas within the Farwaniya Governorate.

In Jahra Governorate, the average rent of an apartment was KD 275 in Jahra area during the second quarter of 2023. These estimates were based on the fact that the aforementioned sites do not have defects, features, or additional services, as they are modern buildings. The average rental price per square meter in commercial real estate for an area of 30- 40 square meters for the ground floor (external facade) amounted to KD 42 in Ahmed Al-Jaber Street in Kuwait City, the same in Salem Al-Mubarak Street in Salmiya, and KD 37 in Tunis Street in Hawally. The average rental value per square meter amounted to KD 45 in Habib Al-Manawer Street in Farwaniya, KD 40 in an internal street in Egaila, and KD 42 in Al-Dabbous Street in Fahaheel. It reached KD 45 in the commercial and administrative area of Jahra.

The estimated market value of commercial real estate (vacant land) in selected areas of the country amounted to about KD 1.4 million in the market area in Kuwait City and on an area of 200 square meters in an internal street. The value in Salem Al- Mubarak Street in Salmiya reached KD 3.1 million on an area of 750 square meters, and about KD 3.3 million on Habib Al-Manawer Street. As for Jahra, the price of the land in Marzouq Al-Miteb Street on an area of 1,000 square meters was about KD 3.5 million, and about KD 3.9 million in Egaila.