Real Estate Activity

Press release

Published November 21st, 2011 - 08:54 GMT

Al Bawaba

Sales activity in the real estate sector saw some recovery in September after slowing in August (Ramadan). Total sales value was up 11.2% year-on-year (y/y), reaching KD 199.5 million. The residential sector accounted for 51% of total sales, with the investment and commercial sectors taking 37% and 12% respectively.

The residential sector has reclaimed its spot as the biggest sector in September after the investment sector had overtaken it for the previous 3 months. Overall, the residential sector recorded total sales of KD 102.7 million, a 50% y/y increase. It also saw 585 transactions carried out during the month, with 2011 averaging 479 transactions per month so far. The sector should continue to do well in the coming months as it is backed by healthy local demand.

The investment sector (apartments and buildings) also saw some improvement in September. Sales reached KD 73.4 million, an 85% jump from the same month last year. The sector, which is mainly composed of apartment buildings intended for rental, has averaged total sales of KD 92 million per month so far in 2011. This compares with averages of KD 30.8 million and KD 52.9 million for the same period in 2009 and 2010 respectively. The increase in transaction size might be partially attributed to higher prices and/or construction costs, but may also indicate increased demand in this sector.

The commercial sector saw 5 transactions carried out during September, taking 12% of the real estate sector in terms of sales value. The small number of transactions is typical of this sector, but is supported by much higher value per transaction compared to other sectors. The commercial sector has averaged KD 4.7 million per transaction in September and KD 2.9 million so far in 2011.

The past few months leading to September saw some slow down in real estate activity; this was likely attributed to seasonal and vacation-related effects, combined with typical reduced activity during Ramadan. However, September showed signs of recovery that should continue to improve throughout the last quarter of 2011.

Background Information

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