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Posted On: 19 February 2012 11:52 am
Updated On: 12 November 2020 02:11 pm

Residential rents likely to remain stable: repor

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Qatar’s real estate sector is expected to continue the last year’s trend with most forecasts projecting optimism and a steady progress in 2012, according to an industry report. Citing Doha-based property consultancy Asteco report, Oxford Business Group (OBG) said, there are concerns that oversupply in some segments could keep prices down in the short term as the flow of new developments more than matches current demand. Rents for residential properties had been broadly stable in the last quarter of 2011, there was a significant increase in the number of transactions and enquiries, a trend it expected to continue this year. There had also been a rise in the number of sales in prime locations such as The Pearl-Qatar in the fourth quarter of the year, a move the Asteco report said indicated a return of investor confidence. The improvement in the market could be given further impetus if contracts for major developments, in particular those for the country’s rail network, sporting stadiums and associated construction projects were awarded, said the report. Asteco Qatar managing director Jed Wolfe told OBG, “Though the completion of new projects will continue to add stock to the market, with supply set to outstrip demand, Asteco does see the sector reaching sustainable growth levels by the end of the year. “The ever increasing amount of international companies coming to Qatar is having a positive effect on the real estate market. Due diligence and research are being prioritised in order for efficiency and operational costs to reach sustainable levels.” The somewhat subdued level of activity in the real estate sector last year is reflected in recent data issued by the Qatar Statistics Authority (QSA), which showed that while the 2011 consumer price index (CPI) rose by 2.1%, the rent and utility component of the index eased by 5.6% over the 12-month period, the OBG report said. This could change though, according to a report from QNB Capital, which said the housing CPI was tipped to grow by 1.4% across 2012, as the country’s expanding population – especially due to inflow from overseas – would heat up demand. Property sales may be given a boost by the higher levels of credit expected to flow into the marketplace this year, with Qatar banks having ample liquidity and increases in disposable income meaning buyers could be drawn towards the real estate sector in greater numbers. Though there are some concerns that Qatar could see a glut in the property market with a large number of prestige residential and commercial developments set to be rolled out in the coming year or so, it is unlikely the country will see a major drop-off in activity. “It is important to control growth in the state’s real estate sector so as not to create a bubble,” Steven Humphrey, the director of Davis Langdon, an AECOM Company, a global construction consultant, told OBG. “However, the risk is low as the money being invested is real and not speculative which should account for real growth.” Most analysts see any supply side excess in the real estate market as a temporary situation, one that is likely to balance out by the end of this year. As such, investors may be looking at moving into property ahead of the expected rebound gaining momentum, seeking out quality before the next cycle of high demand and higher prices kicks in. Gulf Times