Detailed research reports covering real estate sector in the GCC
Real Estate Market Commentary - 11 to 17 March 2012
Mar 17, 2012
Kuwait Financial Centre "Markaz"
MENA REAL ESTATE RESEARCH
Research Highlights: A weekly market commentary
Real Estate Market Commentary
11-Mar-12 to 17-Mar-12
Kuwait: An analysis of the Ministry of Justices data for JanFeb-12 indicated a 93% growth in number of transactions (1,810 transactions) and 40% growth in value transacted (KD 573 Mn) compared to Jan-Feb12. Private residential (Villas) transactions posted a 123.4% growth ( 1,528 transactions) and transacted values grew by 49% (KD 318 Mn) and number of investment properties (Apartments) transactions grew by 9.3% (269 transactions); while value transacted posted a 20.9% growth (KWD 225 Mn) compared to Jan-Feb-2011. Transactions in commercial properties posted a 62.5% growth (13 transactions) with value transacted growing by 176% (KWD 31 Mn) during Jan-Feb-12 compared to the first two months of 2011. Dubai: According to Knight Frank, residential prices in Dubai rose 2.3% Q-o-Q and 0.5% Y-o-Y in Q4-11; while its Global House Price Index exhibited a 0.3% Q-o-Q decline during the quarter as prices dropped in 60% of the 52 countries on the index and listed the emirate among the growing markets globally. Earlier, the Residential Sales Price Index for Dubai published by Reidin.com also reported a 2.3% Q-o-Q increase in Q4-11 to 167 from 163.2 as of Q3-11. Villa Index increased 4.9% Q-o-Q to 316.5, and Apartment Index declined 0.6% Q-o-Q during Q4-11. Knight Frank had previously reported a 1.3% Q-o-Q and 3% Y-o-Y declines in prime property prices during Q4-11 and other market reports by Asteco and JLL indicated stable price trends for Q4-11. Abu Dhabi: According to the Statistics Centre Abu Dhabi (SCAD)s latest monthly release, construction costs remained stable during Feb-12 posting a 0.8% M-o-M growth and a 0.4% decline on an Y-o-Y basis. Average prices of 7 of the 21 building material groups experienced an M-o-M increase during Feb-12, while prices of 9 groups remained unchanged. Notable price increases were reported in concrete and labor cost, while decreases were noted in cement, steel, transport equipment and aggregates & sand. SCAD also reported CPI data for Feb-12 reporting a 0.6% Y-o-Y growth in overall price level and 0.5% Y-o-Y decline in the housing component. Please refer ,,Charts to Note section for more details. KSA: Central Department of Statistics reported that general price index grew by 5.4% Y-o-Y during Feb-12, up from 5.3% during Jan-12. It also reported a 10.4% Y-o-Y growth in housing rents, noting a 12.9% growth in apartment rentals and 7.6% growth in villa rentals during Feb-12 compared to an year ago (housing and related items carries a 40% weight in overall CPI). Estimates for 2012 inflation from Jadwa Investment stands at c.5.3%, up from 5% during 2011, driven primarily by housing rent component and in comparison, National Commercial Bank (NCB) estimated a 4.8% Y-o-Y increase in CPI in 2012. Jordan: The Landlords and Tenants law permitting landlords to increase rents to current market rent value and the consequent increase in residential rentals during Q4-11 is reportedly causing frictions between commercial tenants and owners of properties with longstanding tenancy contracts. Landlords, represented by The Jordanian Landlords and Land Owners Society (JLLOS), claim the old rents are lower than the municipal tax paid for the property and tenants, represented by Jordan Chamber of Commerce (JCC), are reportedly suggesting a gradual 5% increases in rents.
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Developments sourced from various sources including news portals like Gulfbase, Zawya, Reuters, Bloomberg, Trade Arabia, Business 24/7, Arabian Business, The Peninsula, Gulf News, Property wire, Khaleej Times, Saudi Gazette, KUNA etc and also from published reports of real estate brokers and investment research houses.
MENA REAL ESTATE RESEARCH Charts to note:
Chart 1: Abu Dhabi Consumer Price Index (CPI) and house rents 2011-12
Source: Statistics Centre Abu Dhabi (SCAD), Monthly Consumer Price Indices (2011 & 2012)
Chart 2: M-o-M Building Materials Price change Abu Dhabi (Feb-12)
12% 10% 8% 6% 4% 2% 0%
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MENA REAL ESTATE RESEARCH
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