Real estate prices continue to ‘decline’ at a slow pace

The private housing sector is still witnessing stagnation, as evident in the continuation of the decline in residential real estate prices in some areas during the first quarter of 2023.

The global economic crisis, increasing interest rates and other factors played a major role in the decline of real estate prices, which reached unprecedented levels in previous years. As per the data of Al-Hesba Real Estate Company, private housing prices continued to decline at a slow pace in different parts of the country, starting from the fourth quarter of 2022 — four percent lower than the third quarter of 2022 when prices reached the peak. The decline continued in the first three months of this year, which recorded a decline of six percent, reports Al-Qabas daily.

The data indicated that the decline in the first quarter of 2023 ranged from one percent to 10 percent depending on the areas: One percent to five percent in Faiha, Kaifan and Qadisiyah; five percent to six percent in South Surra; six percent to seven percent in East Qurain, Ishbiliya and Andalus; and eight percent to 10 percent in Saad Al-Abdullah and Khairan residential areas.

Also, during the first quarter of 2023, the private housing real estate market witnessed a significant decrease in the value of transactions amounting to KD 224.29 million — 38.3 percent lower than KD364.02 million in the fourth quarter of 2022, and also lower by 49 percent compared to KD439.54 million in the first quarter of 2022.

With regard to internal areas, residential real estate prices in most of the internal areas close to the capital, or what is known as the ‘Golden Square’ that includes Shuwaikh Residential Area, Dahiya, Shamiya and Nuzha, are still steadfast in general despite the repercussions of the global economic crisis and the accompanying successive rises in interest rates.

The consistency of real estate prices in the internal regions is due to the scarcity of land in exchange for an increase in demand for housing units, as well as the lack of new housing cities that are similar to specifications that are attractive to citizens. This is in addition to the fact that those wishing to buy properties in internal areas among the affordable category usually depends on personal financing, not on borrowing from banks.