There was a marked rise in activity in October, according to a study carried out by Kuwaiti property firm Emaar Alahlia, with transactions up 35% in that month compared to September. The report, issued in late November, said that the lowering of the cost of borrowing had helped drive the increased sales push, and predicted that this trend would continue for the final two months of the year and into 2010.
While there had been a drop in prices in some areas in October, the report said this would turn around by the end of the year, with Emaar Alahlia forecasting a climb in housing and commercial property prices by December.
Though a pick up is expected by many analysts, it seems that it is only just beginning, with October's gains just about repairing the falls in activity seen in September, when the Ministry of Justice's (MoJ) monthly report on the registration of real estate contracts showed a 40% fall against the August total. The pulse of the overall market is still somewhat thready, with Alshall Consulting and Investment Company predicting that activity in Kuwait's property sector would be down by 40% this year compared to 2008, before rebounding.
Another report, this one issued by Kuwait Finance House (KFH) in early November, also projected a return to positive territory for the country's real estate industry, saying higher spending by the state and moves to increase the involvement of the private sector in public investments would bolster the recovery.
Though most indicators point to a slow but steady improvement in the property market, there could be more than one pothole in the road to recovery, with possibly the deepest not actually of Kuwait's own making.
In late November, Dubai officials announced they were looking to reschedule the debts of Dubai World and its subsidiary, the property developer Nakheel. The news sent shockwaves through global financial markets, pushing stock exchanges down, especially in the Gulf region.
As yet, it is hard to tell what the longer-term impact from Dubai's latest bout of fiscal developments will be on Kuwait, the region and further afield. From initial accounts, Kuwaiti lenders do not have significant exposure to Dubai World debt, though two banks are believed to hold about $120m of commercial paper between them, so localised liquidity for the real estate market and other sectors of the economy should remain at current levels.
Nevertheless, according to Monica Malik of investment bank EFG-Hermes, the Dubai situation will hit confidence across the Gulf.
"The loss of confidence externally towards Dubai will be marked and should not be underestimated, but is also likely to impact the wider region, although we reiterate marked difference in economic realities on the ground," she told the AFP news agency on November 29.
Still, while the Dubai World debacle may bring little benefits to the emirate or the region in the short term, it could serve as a new starting point going into 2010. The surprise is that such a large default did not happen sooner; it is the timing of the incident that has garnered so much media attention rather than the extent. Dubai still possesses the most developed infrastructure and logistics network in the region, and now has to make the correct decisions to make best use of these going into the new year.
In Kuwait's case, economic realities are generally trending towards the positive. In late November, the Finance Ministry announced it had posted a $20bn budget surplus for the first seven months of the fiscal year that began in April, a dramatic turn around from the forecast deficit of $16.8bn.
Though currently the Kuwaiti real estate sector is somewhat sluggish, it could be a fair time for cashed-up investors to look at the market. According to a recent report by the National Bank of Kuwait, residential property prices are still edging downward, falling back some 8% annually on a rolling six-month average basis.
With the cost of borrowing having fallen steeply, and prices as yet to regain their upward momentum, Kuwait's property market could soon start to attract buyers.