Property market experts in Doha expect it would take yet another year to stabilise the land prices that took a nose dive during the last two years in the aftermath of global credit crunch.
Land prices had witnessed a huge drop ranging from 15 percent to 70 percent during 2008-2009 in the country. Though some areas within Doha city had survived the slump, the suburbs really wobbled in the downturn.
While the prices of the residential plots within Doha dropped 20-30 percent, the suburbs witnessed a steep fall of 50-70 percent during the last two years, said the head of a leading real estate and investment company in an interview to an Arabic daily.
Ahmed Al Arouqi, managing director, Aqar Real Estate development and Investment Company said value of the commercial land dropped 15 to 20 percent during this period.
The prices of less attractive areas fell further down. The prices of plots meant for villas witnessed deeper drops when compared to the land suitable for building apartments.
Between August 2008 and September 2009, the land value of housing plots in some parts of Doha city dropped by 20 percent, the glut in the interiors recorded around 55 percent drop. In the less attractive interiors, there were some areas which witnessed a sudden drop of 30 to 80 percent in the land value.
The lands which are ideal for the construction of commercial buildings dropped 16 percent to 55 percent within the Doha city. In general, the land prices in Qatar dropped between an average 38 percent and 50 percent during the last two years, he said.
However, the prices of lands in important locations were far or less immune to the market fluctuations.
For instance, lands facing Salwa Road, Grand Hamad Street, Suhain bin Hamad Street, Al Saad, Al Mirgaab, Bin Mahmoud, C-ring and D-ring roads were stable during the period.
The slump in the land value has also reflected on the rentals during the period. Rents dropped by 20.4 percent in 2009 and it are expected to drop further by 10 percent during coming months as Qatar is expected to deliver 3,000 new housing units in 2010, Al Arouqi said.
Meanwhile, a market research analysis released by “Century 21Qatar” here yesterday said prices and rental rates in Qatar have declined approximately 25 percent in 2009.
“Quarter four 2009 witnessed a mixed growth indicators for apartment and villa rates in different areas across Doha due to market vulnerability and confusing and uncertainty among owners. Though apartment rentals showed a slight recovery in October, decline in the following two months proved market fragility against unjustified recovery. In December alone, apartment rates declined up to 10 percent in some areas while increased slightly in Bin Mahmoud and Al Saad indicating beginning of rates stabilisation in these areas,” the report said.
According to the report, the residential rents are expected to face further decline due to supply increases where approximately 3,000 units are expected to enter the market in the first half of 2010.
The records of sales department in “Century21 Qatar” indicated a remarkable slowdown during December 2009 in terms of leased properties and number of inquiries.
Though the market leaders hope that the situation in the real estate sector would improve in the second half of this year, it would still take time to reverse to the level of 2006-2007 periods.
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