The real estate market in Kuwait has seen a decline due to seasonal reasons and also partially due to global economic developments, according to the third quarter real estate report issued by Kuwait International Bank.

The report says that total sale dropped by 29 percent, with KD685mn worth of contracts and power of attorneys being realized. This is due to a dip in total transactions in the market, which stood at 1180 in comparison to 1660 deals signed during second quarter of 2015.

The average deal value in third quarter of the year is, however, the same, as in the previous quarter at KD581000 per deal.

The major reason for this decline is due to seasonal reasons, such as summer holidays and the holy month of Ramadan, Eid Al-Fitr and Eid Al-Adha, all falling in the same current quarter, thereby leading to overall slump.

When comparing the performances of this quarter with that in 2014, the total sale dropped by 28 percent, and the number of deals went down by 42 percent. But, the average deal value grew by 23 percent on annual basis. Thus, the market levels are still far away from the levels recorded during same period last year.

As for sector-wise performance, the sales in residential and investment sectors bounced back, while the sale in commercial sector rose. The residential sector sale amounted to KD277mn only, marking 33 percent dip quarterly and annually alike. Residential sector recorded 760 deals, marking 34 percent quarterly decline, and more than 53 percent decline on annual basis.

The sales in investment sector dropped by 35 percent quarterly, and by more than 43 percent annually, realizing KD273mn. The total transactions in the investment sector during the said quarter touched 373 mn deals, a dip by 19 percent quarter-on-quarter. But, the total deals in this sector remained higher than that in 2014 by 3.6 percent.

The commercial sector, however, recorded 10 percent growth in sale, realizing KD112mn quarter-on-quarter. The commercial sale level in this quarter is two times higher than that recorded during same period in 2014, with deals having bounded back quarter on quarter.

The third quarter data of this year has established Hawally governorate as the largest share of total sale with more than 29.4 percent sale. Al-Ahmadi Governorate came second with 21 percent of total market sale KD134mn. Based on analysis of market performance based on geographical areas, it was also noticed that Salmiya came first with 13 percent of total market sale (KD83mn), followed by Mahboula at 6.5 percent of total market sale.