Adel Lawson
Qatar property market broadly stable with rising demand
by , 01-17-2012 at 10:51 AM (416 Views)
By ARABNEWS via Mannzili.com
Published: Jan 17, 2012 01:02 Updated: Jan 17, 2012 01:02
JEDDAH: The number of transactions andinquiries is expected to continue rising this year with the supply/demand gapnarrowing, says Asteco Qatar Q4, 2011 report.
Residential rental rates in Qatar were broadly stableacross all locations in the fourth quarter of last year while the number oftransactions and inquiries increased as demand picked up, leading propertyconsultancy Asteco said in its latest report.
With the exception of some marginal rises,rents are likely to remain unchanged this year but demand is expected tocontinue rising.
While supply is set to outstrip demand, thesupply/demand gap will decrease towards the end of the year.
"The performance of Qatar's propertysector is likely to be similar to 2011, with sales prices and rental ratesremaining relatively flat," said Jed Wolfe, managing director, AstecoQatar.
"Bearing in mind 2011 was the thirdconsecutive year of the global downturn experienced by the GCC markets, theQatar real estate market performed relatively well, with pricing generallystabilizing across all sectors," added Wolfe.
Rental rates for a two-bedroom apartment inAl-Sadd and the Pearl-Qatar were onaverage QR6,250 and QR13,000 per month respectively in the fourth quarter.
There was a small decline in rents in theprime area of West Bay, but this was due largely to a small number oftransactions rather than a market trend, while rents for compound villas roseslightly, with high quality luxury villas best performers.
Rents for good quality villas rangedbetween QR23,000 and QR40,000 per month.
Demand for prime villas that are maintainedto high international standards marginally outstripped supply and this looksset to continue.
Demand in Qataris generally expected to be focused on prime locations such as West Bay and mayminimize the effect of increased supply.
There was a distinct increase in apartmentsales transactions in the Pearl-Qatarover the last three months indicating that investor confidence is returning.Transactions largely occurred in the secondary market by investors looking fordistressed sales.
"With prices having stabilized for thefourth consecutive quarter, there is now strong evidence to suggest that priceshave finally bottomed out and will not decline further," said Wolfe.
Inquiry levels from both Qataris andexpatriates for freehold apartments were distinctively higher than during thethird quarter of last year, which may result in a more positive sales market in2012.
Overall performance of the property marketmay improve this year depending on whether contracts for rail network, stadiaand associated construction projects are awarded.
The fourth quarter witnessed the finallettings in Tornado Tower and Al-Fardan Commercial Tower, two of the mostprestigious office towers in West Bay.
The commercial office market, however,continues to be oversupplied with several new developments approachingcompletion.
Asteco's research indicated a stabilizationin both the residential and commercial leasing markets during 2011.
Rental rates in both sectors haveexperienced only minor fluctuations during the year.
Although demand was effectively outstrippedby supply, a steady increase in demand was witnessed quarter-on-quarter, beingsufficiently high to prevent further declines in rental rates.
One-bedroom apartments in prime locationsproved most popular within the residential leasing market, whilst prime luxuryvillas of high quality performed the best during the year.
Demand for good quality, prime villas thatare maintained to high international standards marginally outstripped supplyand this looks set to continue.
In the commercial leasing market, the vastproportion of tenant inquiries were from international companies seeking 100 to600 square meters of space.
Generally, tenants were not willing tospend large sums on fit-out, preferring to opt for fitted office space orbuildings where fit-out costs were relatively low.
The report said 2011 saw renewed interestin locations around the airport as businesses benefited from lower rents thanthe Diplomatic Area and reduced traveltimes to and from the airport.
Overall, the residential sales market wasrelatively flat during 2011, with little improvement over 2010. However,inquiry and transaction levels were up in the latter part of the fourthquarter.
Bearing in mind 2011 was the thirdconsecutive year of the global downturn experienced by the GCC markets, the Qatar real estate market performedrelatively well, with pricing generally stabilizing across all sectors.
It is likely that there will be little orno increase in rental rates for both the residentialand commercial leasing markets during 2012. However, we can expect a steadyincrease in demand.
Overall, supply is set to outstrip demand,but the supply/demand gap will decrease toward the end of the year.
The increased supply in certain micromarkets and locations, such as prime West Bay, may have a more negative impacton rental levels. However, demand is expected to be focused on these locations,which may minimize the effect of continued supply.
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