Kuwait’s real estate market activity has improved significantly despite volatility during the first half of the year, compared to the second half of 2016, though it remained down by 10% compared to a year before, a report has said.

The latest Economic Update from the National Bank of Kuwait said that improved activity was particularly visible in the residential sector, which also helped keep real estate prices steady during H1 2017.

June experienced the usual slowdown from the start of summer and Ramadan, the report added. Sales in the month eased to $451.5 million, down by 14.6% year-on-year.

It explained that the annual decline was mostly due to weaknesses in the investment and commercial sectors. However, residential sector activity mitigated further weakness, with healthy activity despite the seasonal factors. Real estate price indices continued to hover around their six-month averages, except for the residential land price index, which has retreated marginally.

The residential sector maintained a solid performance that supported overall activity in June, with interest revived in residential plots. Growing at 15.7% y-o-y, residential sales amounted to $337.8 million in total on 308 transactions.

A total of 161 plot sales were recorded during the month, an 85% increase from the previous year; most activity was in Abu Ftaira and Al-Salam areas. During 1H 2017, 757 residential plots were sold compared to 629 plots for the same period last year, the report added.

Residential home prices remained steady with residential land prices easing slightly. The NBK residential home price index stood at 151.8 in June, with the report adding that the contraction from a year ago was the slowest in 13 months at 7.7% y-o-y.

The NBK residential land index eased to 162.9 in June from 168.0 in May, dragged down by a bulk sale of 49 plots at a relatively lower market price; the pace of decline from a year ago remained steady at 10%-12% y/y, a pace that was sustained during the last three months.

The investment sector continues to underperform despite the short-lived surge in activity in May. Sector sales totalled $168.2 million, down 30.8% y-o-y. The number of transactions was also down by 25% y-o-y to 74. Apartment sales continue to carry the investment sector during the current environment. Single apartments bought for investment represented 61% of total transactions.

The NBK investment building price index remained steady in June. The index came in at 190.1 down only 5.6% y-o-y, an improvement from the double-digit decline rates recorded the previous year.