The real estate sales in Kuwait registered a 13 per cent year-on-year growth in November to hit KD312 million ($1.1 billion) supported by another strong performance from the investment sector, said a report.

This is the fifth consecutive month this year that property sales has surpassed KD300 million, according to the country's top lender National Bank of Kuwait (NBK).

The sales in the residential sector reached KD140 million in November, a modest 2 per cent year-on-year increase. This softness came despite a continued surge in average transaction values (over 62 per cent year-on-year), which was effectively offset by a sharp decline in the number of transactions (down 37 per cent year-on-year).

These large swings are not uncommon in a property market where month-to-month trading volumes are relatively low. Nevertheless, the figures broadly support the interpretation that supply shortages in the residential market are pushing prices higher, said the NBK report.

In terms of location, 40 per cent of transactions were in Ahmadi Governorate, mostly in the Sabah Al-Ahmed Sea-City. Mubarak Al-Kabeer governorate accounted for a further 25 per cent. Sales of land plots – as opposed to finished buildings – accounted for 60 per cent of all residential transactions in November, it added.

NBK said with one month to go before year-end, 2013 looks set to be a record year for the property sector in Kuwait. Overall sales values should average over KD300 million per month for the first time, while the number of transactions in the investment and commercial segments should reach all-time highs," the lender said in its review.

Sales in the investment sector – mostly apartments and apartment buildings – increased to KD147 million in November, more than doubling their levels of a year earlier.

The average transaction size reached KD 1.2 million, up 77 per cent year-on-year. Again, these numbers can be volatile month-to-month, but on a year average basis, both transaction numbers and average values are set to reach a record in 2013. Individual apartments, mostly in Mahbola, made up half of all transactions, followed by whole buildings, which made up 36 per cent, said the report.

Shortages of residential housing may be supporting the market by boosting demand for apartments for both purchase and rental, it added.

NBK pointed out that in the commercial sector sales dropped to KD25 million from KD70 million a year earlier. "Sales were particularly ‘lumpy’, and the decline came on the back of just four transactions, compared to nine a year earlier," said the top lender in its report.

"Once again, however, activity in the sector has generally been strong this year; both the number and value of commercial sector sales are set to reach record levels in 2013," it added.-TradeArabia News Service