In the first half of 2024, the real estate market grew by 7% compared to the second half of 2023, with contracts totalling approximately KWD 1.619 billion. Despite this overall growth, specific sectors like private property and commercial contracts saw declines. Warehouse contracts increased by 55.5%, reflecting a strong demand for logistics spaces. Conversely, investment and commercial contracts declined by 8% and 11.5%, respectively. The market shift suggests a growing focus on niche areas such as warehouses and exhibitions, while broader economic factors influenced the reduction in other transaction types, indicating evolving priorities within the real estate sector.
The real estate market in the country exhibited a seven per cent growth in the first half of 2024 compared to the second half of 2023. From January to June 2024, the total value of real estate contracts registered with the Ministry of Justice amounted to approximately KWD 1.619 billion. This marks an increase of KWD 112 million from the KWD 1.507 billion registered in the second half of 2023. Despite this overall growth in total contract value, various types of real estate transactions experienced a notable decline, with the exception of exhibitions and warehouses.
During the year's first half, four exhibition contracts were registered, amounting to KWD 10.8 million. The number of warehouse contracts increased by 55.5 per cent, with nine contracts compared to four in the previous period. The total value of warehouse contracts rose to KWD 16.811 million, up from KWD 8.544 million in the preceding period.
Private property contracts totalled 1,496, with a value of KWD 689.9 million, indicating a decrease of 54 contracts compared to the second half of last year. Investment contracts also declined by 8 per cent, totalling 509 contracts valued at KWD 451 million, down from 554 contracts previously. Commercial contracts numbered 69, with a total value of KWD 406 million, reflecting an 11.5 percent decrease from the 78 contracts registered in the second half of last year.
Craft contracts experienced a significant decrease of 41 per cent, with only nine contracts registered totalling KWD 9.125 million, compared to 22 contracts previously. Coastal strip contracts notably decreased in a ratio of 1 to 4, with only one contract worth KWD 32 million registered in the first half of this year, down from four contracts in the second half of last year.
An official from the Ministry of Justice explained that despite the overall growth in the real estate market, specific sectors like private property and commercial contracts experienced a decline in the number of transactions. This trend suggests a shifting focus within the market, potentially towards more niche areas such as warehouses and exhibitions.
The data suggest that the real estate market is experiencing a dynamic shift, with certain sectors gaining prominence while others see a downturn.The increase in warehouse contracts is particularly noteworthy, indicating a growing demand for storage and logistics spaces. An official emphasised that this significant rise highlights demand for logistical infrastructure, crucial for supporting the country's expanding economy.
The decline in private property contracts, on the other hand, could be attributed to various factors, including changes in market demand and economic conditions. Investment contracts also saw a reduction, which may reflect a cautious approach by investors in response to market uncertainties. The reduction in commercial contracts might be linked to broader economic trends affecting business activities.
In the craft sector, the substantial decrease in contracts highlights a potential decline in small-scale commercial activities or a shift in focus towards other sectors. The dramatic drop in coastal strip contracts suggests a reduced interest or availability of coastal properties, which could impact the market's diversity.
In conclusion, the real estate market's performance in the first half of 2024 reflects a blend of growth and sector-specific shifts. The increase in warehouse and exhibition contracts underscores a changing landscape in real estate priorities, driven by economic demands and logistical needs. As the market continues to evolve, understanding these trends will be crucial for stakeholders aiming to navigate and capitalise on the opportunities within the real estate sector.
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