Qatar Real Estate News
Qatar property sector to witness oversupply by 2010
Qatar real estate market is likely to attain oversupply in 2010, with property prices dropping further, a leading real estate consultancy noted.
The Landmark Advisory Group, in its report said that the supply deficit will shrink rapidly during the short to medium term, with probably the population also shrinking by 2 percent, and the market may be oversupplied by 2010.
Being the world’s largest exporter of liquefied natural gas, Qatar will remain oversupplied with 10,000 homes by 2012, with a 2 percent annual growth in population. The demand-supply will attain equilibrium when the annual population growth touches 5 percent mark, the report stated.
Doha current experiences a scarcity of 1500 homes and 33,000 homes are expected to hit the market by 2012, the report said.
This oversupply is a positive sign, as it will allow price correction in the market, which was earlier chronically undersupplied, with exponential rent increases.
The average freehold sale prices dropped between 25 to 30 percent during the middle of fourth quarter and the end of first quarter.
The rents in Qatar fell between 5 to 10 percent during the fourth quarter and by May 2009, the villa rents fell another 15 to 20 percent, while the apartment rates remained comparatively stable. Rents are likely to decrease further, the report said.
Moreover, the housing supply and the willingness of landlords to accept lower rents to attract tenants and fill vacancies are putting considerable pressure on rents in Doha.
Mortgage lending to expatriates have become a rare phenomenon, and carries prohibitive restrictions, the report said, while also adding that the loan-to-value ratios and load periods for both locals and expatriates have fallen, while the minimum salary requirements have increased sharply.
Posted on 13/6/2009
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