Given the high oil costs and the recovery of non-oil activity that signal a sustained acceleration of the national economy despite the rebound in inflation
Kuwait: Kuwaiti financial outlet “Markaz” revealed in its “Kuwait Real Estate H2 2022 Outlook” report that the country’s real estate sector has continued to recover from the blow suffered by the COVID-19 pandemic over the past two years and is recently accelerating. albeit modestly. The upward trend is basically due to higher transactions in the residential apartment and advertising real estate segments amid optimism about the advance of economic activity. Strong macroeconomic fundamentals, supported by emerging oil costs and demand for a sustained rebound in the non-oil sector. , point to a positive outlook for the domestic real estate market.
Developed and published with the aim of helping investors gain an in-depth understanding of the current state of Kuwait’s real estate market, the report was prepared through Marmore MENA Intelligence, a wholly owned subsidiary of Markaz. The tests and forecasts of the report are based on the “Markaz Macro Real Estate Index”, which takes into account various economic signs such as oil and non-oil GDP growth, inflation, the creation of new tasks, unemployment rates, interest and population growth, among others. . others. It analyzes the functionality of subsectors such as residential, office, retail and commercial during the first six months and analyzes the effect of various new socio-economic policies and reforms and real estate projects in the area. The report’s findings and observations are supported by knowledge over seven years, as well as estimates for the remainder of the existing year and forecasts for the following year.
The real estate market has benefited from the easing of pandemic mitigation measures by the government and the opening of new businesses and the expansion of existing businesses, which resulted in the creation of improved occupancy rates in the real estate sector and increased investor confidence in the real estate sector in the first quarter and the current quarter of 2022. The total price of real estate transactions continued to rise in the first quarter of 2022, with the Istithmari (residential apartments) and advertising real estate subsectors on an upward trajectory, however, sales of personal residential housing, which drove the recovery last year, declined during the same period.
During the first quarter of the year, Istithmari’s transaction price increased by 9% compared to the first quarter of 2019. Commercial real estate sales appear to be recovering, recording a 128% year-on-year expansion in the first quarter of 2022 However, the transaction price has not yet reached pre-pandemic levels and is 38% lower than in the first quarter of 2019. In contrast, sales of personal residential homes fell about 20% to KWD 517. 6 million, from KWD 644. 2. millions registered in the first quarter of 2021. However, it remains above pre-pandemic levels, 37% more than the KWD 376. 5 million recorded in the first 3 months of 2019.
The Markaz report presents a positive outlook for Kuwait’s real estate sector for the rest of the year given the projected expansion of the domestic economy aided by strong oil and non-oil economic growth, as well as an improved fiscal balance, indicating healthy degrees of government profits and expenditures. While an increase in interest rates may be a drag on the economy and the sector, the declining speed of rate hikes through the Central Bank of Kuwait compared to the U. S. Federal Reserve. The U. S. can mitigate the impact. It should also be noted that Kuwait has experienced an increase in inflation due to its dependence on imports, inflation levels in the country are lower than those of some primary economies.
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About the Kuwaiti Monetary Center “Markaz”
Established in 1974, Kuwait’s K. P. S. C “Markaz” Financial Center is one of the leading investment banking and asset control establishments in the MENA region with total assets under control of more than KD 1. 04 billion as of December 31, 2021. Over the years, Markaz has pioneered innovation through new concepts that led to the creation of new investment channels. These channels have unique features and have helped Markaz broaden investors’ horizons. Examples come with Mumtaz (the first national mutual fund), Idikhar (the first cash market fund in Kuwait), MREF (the first real estate investment fund) and Forsa Financial Fund (the first and only GCC market place maker since 2005), all conceptualized, established and controlled through Markaz. Markaz indexed on the Kuwait Stock Exchange in 1997.
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