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Value of real estate deals in MENA drops in August

Last updated: Wednesday, October 03, 2012 2:01 AM

JEDDAH/KUWAIT – Continuing from the trends witnessed toward the end of July 2012, real estate transactions in key MENA markets trended downwards in August 2012, owing to a seasonal slowdown and lower business activity levels due to Ramadan and Eid holidays, Kuwait Financial Center (Markaz) monthly report for September 2012 revealed Tuesday.

Total value transacted in all reported markets combined moved downwards in August compared to the previous month. However, on a Y-o-Y basis, both number of transactions (-40.0 percent) and value transacted (-24.8 percent) declined Y-o-Y in Saudi Arabia, while Qatar & Kuwait witnessed Y-o-Y increases.

Data from Dubai Land Department (DLD) revealed that real estate transactions in August receded compared to the previous month, but were marginally higher than the levels compared to a year ago.

The number of transactions were down (-58.4 percent) compared to July 2012, and value transacted declined 62.5 percent over the same period.

Compared to the previous year, the number of transactions in August inched upward by 1.9 percent while value transacted decreased by 15.6 percent to AED1,172 million.

In Kuwait, as per the Ministry of Justice (MOJ) data, real estate transactions in Kuwait for the month of August moved down from the previous month, as both number of transactions and value transacted decreased by 25.9 percent & 11.8 percent respectively.

However, on a Y-o-Y basis, the number of transactions grew by 14.6 percent of what was recorded the previous year, while value transacted grew 14.9 percent to KD179 million.

In Saudi Arabia, an analysis of MOJ data for August this year showed that the number of transactions in the Kingdom continued to witness a downtrend, both compared to the previous month and a year ago.

The downtrend was driven by transactions in Riyadh, as number of transactions and value transacted moved down compared to July 2012 and the previous year.


As compared to the prior month, number of transactions recorded in Saudi Arabia and value transacted moved down by 30.0 percent & 64.6 percent respectively.

Further, the number of transactions receded 40.0 percent from a year ago, while the value transacted decreased by almost a quarter and reached SR4,302 million.

In Qatar, MOJ data showed transactions in Qatar grew both compared to last month, and from a year ago in August 2012. The number of transactions grew 10.6 percent from July, while value transacted moved down marginally (-0.2 percent). Also, compared to Aug-11, the number of transactions surged 86.7 percent, whereas value transacted increased significantly by 71.9 percent to QAR 2,655 million.

Housing component of CPI data indicated that housing & rental costs remained largely flat in the region in August compared to July. No changes were recorded in Kuwait, Dubai, Abu Dhabi & Egypt, while marginal increases were reported for Qatar (+0.1 percent) and KSA (+0.1 percent).

However, housing costs were higher in KSA (+7.7 percent), Kuwait (+1.5 percent) and Egypt (+7.2 percent) compared to August 2011. Lower housing costs were reported for Dubai (-5.3 percent), Abu Dhabi (-2.2 percent) & Qatar (-3.3 percent) over the same period.

Reported lending to the real estate sector in Qatar was flat in August 2012 compared to the previous month, but increased from a year ago (+28.7 percent). Similarly, real estate credit trends in Kuwait was flat compared to Jul-12, but moved up 3.6 percent as against a year ago.

Further, the number of mortgage loans provided (-12.9 percent) and value of mortgages disbursed (-89.4 percent) in Dubai declined from a year ago. As compared to July12, the number of mortgages and value disbursed were both down at -39.9 percent and -9.0 percent respectively. – SG

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