Qatar Real Estate News
Recovery of Qatar property market expected in 2011
Qatar will have to wait for another year, witnessing decline in property prices, after which, it is likely to head towards recovery in 2011, and thereafter its cautious approach towards real estate development will begin to pay off.
According to experts in the industry, Qatar has learnt its lessons from its neighbour Dubai, which imploded during the global financial crisis, with residential prices falling up to 60 percent from their peak levels in 2008.
Although Qatar remained largely unaffected by that crisis, the cautious approach adopted in controlling development of new offices, homes and shops, imply that its budding property market may take up to a year’s time to heal.
According to Analysts at The First Investor (TFI), an investment bank, housing prices in Qatar has already fallen by 30 percent since the crisis, and will fall by another 10 to 15 percent before bouncing back next year, given, the disciplined control on new building by the government.
TFI noted that the contractors in the UAE are taking help of Qatar’s attractive construction market for all types of property, which has seen an increase of 7 percent, touching $5.6bn in 2010.
As for Qatar’s commercial property sector, it recorded a decline of 20 to 30 percent last year. The rates are likely to stabilize towards the second or third quarter this year, revealed property consultants, DTZ, in their report to Reuters.
Further, with the massive expansion happening at Qatar’s natural gas facilities, compared to 2.5pc projection in the UAE, this is likely to generate a surge in demand for real estate in Qatar, unlike Dubai where expats are seen leaving the place due to shaky job market situation, according to Reuters poll in January.
About 500 or more development projects were either on hold or were scrapped during the downturn in the UAE, while in Qatar the number of such projects were only seven, said Proleads, a research firm.
The Managing Director for MENA region at Jones Lang LaSAlle, Blair Hagkull, said that the government units in Qatar are working towards increasing occupational demand in Qatar, particularly to create long-term jobs, so as to diversify its economy beyond extraction of resources.
Qatar will continue to invest in maintaining growth momentum in domestic market, while also investing in trophy assets overseas. Qatar ensures that its major real estate firms battles the recession either through defensive mergers or by using the real estate arm of the country’s sovereign wealth fund to invest in them.
However, the policy adopted by Qatar to insulate its property market from any Dubai contagion, may not help in getting several of the Europe’s biggest real estate spenders to Qatar, atleast for now.
Qatar, Saudi Arabia, Oman and Bahrain are considered by few market observers as being shut to foreign buyers, who are of the opinion that they have virtually no chance of winning, against the prospect of bidding wars for plum assets.
Posted on 25/2/2010
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