Qatar Real Estate News
Supply surpasses demand in housing sector
According to a study by Century 21 Qatar, a leading real estate sales network organization, supply volumes are much ahead of actual demand for real estate in the market.
This is visible in the several under construction buildings that spread across the city of Doha, the company said.
Residential apartments represent the highest activity in the construction market and this was in response to the shortage of residential units due to population growth.
On an average, about 5000 residential units are entering the market, while majority of the construction activity has been happening in areas such as Al Matar, Umm Gwalina, Mansoura, Al Hitmi, Muntazah, Bin Mahmoud and Al Sadd.
Such huge supplies, coupled with economic downturn directly led to decline in demand for housing, and badly affected rental rates since last quarter of 2008, Century 21 said.
Rental and prices have dropped by 35 percent since October 2008, almost to the level of Q1 2008. The drop in demand has compelled villa owners to reduce rentals by 25 percent.
Negativity is also seen in office space, on both sides of demand-supply equation. The increase in office space supply was concentrated in several vital commercial hubs of the city, particularly West Bay, the study shows.
However, the Century 21 report shows that demand is heading towards stabilization at a slow pace, following constant decline in real estate demand seen during the summer and Ramadan months.
Signs of recovery have been noticed during September, with comparatively improved demand for properties. Even the leased properties and total number of enquiries have shown improvement. Although the decline in rental rates still prevails, the market will eventually get stable, Century 21 said.
Posted on 6/10/2009
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