Investors in the Qatari market have been warned against panicking by real estate officials, who explained that although the phenomenal growth over the past year has slowed down, prices have stabilised and the industry will strengthen once again over the coming year.
“There are a lot of positives in the Qatari market at the moment,” explained general manager of Asteco in Qatar, David Oayda, who said that the constant increase in population and the lack of supply of residential accommodation makes investing in real estate an attractive proposition in terms of leasing potential.
“Over the past few years, around 60% of the market has been driven by speculation, with people looking for short term investment and maximum capital gains,” he said, adding “but now growth has slowed down and credit is harder to come by, the speculators have stopped and the market is now mostly made up of end-users and long-term investors.”
He explained that with this shift in investors, the company’s services have also shifted, and whereas most of their work had previously been focussed on sales and marketing, the current situation has resulted in their leasing services becoming a major part of business.
He also described how consultancy has become more important, as developers realise the significance of tailoring what they have built to suit the specific needs of the local market.
“Whereas people would build whatever their architects designed for them in the past, they are now recognising the importance of building what is needed, and we have been helping many developers to identify the best way of doing this,” he added.
His colleague, and senior valuer at Asteco Qatar, Noel Gibson, explained that the most noticeable negative impact of the global credit crisis has been the change in sentiment surrounding the market, which has led to reluctance to purchase property at the moment.
“With speculators out of the market, there have been less transactions taking place, but prices have been stable since the last quarter of 2008 and the eradication of the inflationary pressures brought about as a result of speculators will benefit end-users in the long term,” he explained.
Oayda also claimed that the current supply and demand dynamic which has led to spiralling rental costs for residential accommodation is set to continue for “ at least the next two years,” as the population of Qatar continues to expand.
However, he was keen to point out that the Qatari real estate market is set to grow in the coming years, and although many people are currently curbing their spending, investment in the sector is still represents a worthwhile business opportunity.
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