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Thu 1 Oct 2009 01:28 PM

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Kuwait property sales up 8.6% in Aug

Real estate sales see first rise of this year, official data shows gradual recovery happening.

Kuwaiti property sales clocked up 8.6 percent in the year to August, the first rise this year, official data showed on Thursday.Sales in the Gulf Arab state rose to KD96.61m ($337.2m) from KD88.95m in August 2008, the data showed.

Residential property deals, which represent the biggest portion of total real estate transactions, were up 31.2 percent to KD55.4m, compared to August 2008.

Property sales, especially residential units, had been falling since the government placed restrictions in 2008 barring private firms from trading in existing houses to prevent unjustified increases in prices.

The National Bank of Kuwait said in a research note on Thursday that it saw a gradual recovery in real estate activity.

"The combination of a steadily improving economic backdrop, easier financing conditions and the impact of the recent legal ruling which will allow Islamic financial institutions to trade residential property should continue to push real estate sales off their lows," NBK said.

"We look for property market activity to strengthen further in 2010."

Islamic lender Kuwait Finance House (KFH), said in August that it had won a verdict against the ministry of justice, opening the way for it to finance private real estate investments in the country.

Investment property sales rose 5.9 percent to KD35.9m, while commercial property sales plunged 58.4 percent to KD5.3m in August, compared with the same period a year earlier.

Commercial property in Kuwait typically refers to apartment buildings meant for leasing, mainly to foreigners. (Reuters)