Housing supply ‘above demand’ in Qatar now

n the aftermath of Qatar winning the 2022 bid, some real estate agents have tried to facilitate a rent hike in the country

Supply volumes of residential units are “high above” the current demand levels to trigger rent increases that have been expected soon after Qatar winning the 2022 FIFA World Cup bid, market consultant Century 21 has said in a report.
Expectations that Qatar winning the World Cup bid would immediately spur rent increases in the local market “have proved unrealistic as supply volumes of residential units are high above current demand levels”, Century 21 said in its latest Qatar real estate market overview.
In the aftermath of Qatar winning the 2022 bid, some real estate agents have tried to facilitate a rent hike in the country.
In the week after December 2 (when the bid winners were formally announced) they tried to “stop promotions and slightly increase negotiation thresholds”.
But these have met with “weak response” from potential tenants forcing the real estate agents to “end these” towards December-end, according to Century 21.
It, however, said the “residential rental market” had proved resilient in the last two months with “positive growth in rents” in a number of areas around Doha.
“The increase in demand for rental properties has been attributed to the healthy phenomenon of tenants shifting towards central areas of the city in the light of the increasingly affordable rent levels across the city.
“Flight for quality has been a key motivation for changing residence with current market conditions helping tenants avail of quality units at unprecedented monthly rates. With increasing pressure on residential unit supply, realtors competing for securing better share have helped stir the market by offering generous grace periods among other incentives.
“Apartment-to-villa shifting has been noticed widely among residents last year as villa rates are currently at similar level of what apartments used to get about two years ago.”
With the exception of Al Dafna, the other areas in Doha have seen standard apartments being rented out for approximately between QR4,100 and QR6,200 a month (in December, 2010).
Apartment rents have fallen between 2% and 6% last month in areas such as Al Sadd, Bin Mahmoud, Al Mansoura and Madinat Khalifa. On the other hand, demand increased for units in areas such as Bin Omran where average monthly increases of 6% were registered in December, 2010.
However, top-end apartments are still available only at higher rates exceeding QR10,000 a month for new and prime areas such as the West Bay and The Pearl.
Unlike apartments, “villa rent indicators” had shown clear evidence of “positive growth” in most areas of Doha during December, Century 21 said.
Villa rents still average between QR10,000 and QR13,000 a month depending on the area and quality.
Out of 13 areas under study, it said, villa rent declines were seen only at three areas - Aziziya, Gharaffa and Mureikh - last month. While Aziziya and Gharaffa registered only a 2% decline Mureikh had seen an 8% fall in villa rents.
Areas that have registered villa rent growth include Duhail (11%), Muaither (8%) and Rawdat Al Matar (7%).
The report said growth (of villa rental) is seen as a “direct indicator of increasing demand” for villas in the market and as a “first step towards future stabilisation”.

Source: http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=408917...