Kuwait sees surge in commercial property deals

Kuwait's real estate market grew 43 percent in the second quarter of 2011, with commercial property deals surging 172 percent, research by Kuwait Finance House has found.

Sales of residential properties rose 40.9 percent in the second quarter, but were outpaced by commercial real estate which saw a 172 percent rise in sales, the report said.

The value of transactions reached KD1.03bn for the quarter, up from KD721m the previous quarter. Increased activity helped push prices up 3.1 percent to an average of KD981 ($3,602) per sq m, the report said.

Research from real estate firm Coldwell Banker Kuwait last month said the Gulf state’s property market was showing signs of recovery, aided by accelerated investment by the private sector.

However, questions remain over the strength of the Gulf state’s residential recovery, which has been hamstrung by an underserved home loans market.

Gulf Bank said in July it had lobbied for an overhaul of mortgage regulations, which currently prohibit non-Islamic lenders from offering home financing packages to residents.

“Mortgage loans are something that is a big problem here in Kuwait,” said Aly Mahmoud Shalaby, head of consumer banking at Gulf Bank, Kuwait’s second largest lender by market value. “Conventional banks are upset… we’ve [put] pressure on the government.”