Although too early to assess effect on real demand and prices, the immediate impact of FIFA’s decision to host the 2022 World Cup in Qatar has boosted confidence in the local property market, with a marked increase in the volume of both sales and leasing enquiries, according to the latest data from Asteco property management.
“Investors in the property market are likely to observe caution by seeking long-term investment rather than short-term speculation. However although it is too early to gauge the real impact on demand and prices, the market has received a boost in confidence as a result of Qatar’s successful bid,” said Jed Wolfe, Regional Director, based at Asteco Property Management’s office in Doha.
Other than the excitement around the winning FIFA World Cup bid, the Qatar Report Q4 2010 revealed a lack-lustre market performance with subdued activity. One bright spot was in the more established areas of Al Saad and Bin Mahmoud districts which continued to show signs of stabilisation with a slight rise in the average price of one bedroom units from Q3 at QAR 4,875 and QAR 4,250 per month respectively.
More recent property developments such as The Pearl Qatar, were subject to only slight rental price declines, another indication that the market has started to show clear signs of recovery.
“A gradual increase in demand was recorded after Ramadan and Eid as existing tenants living in the capital were taking advantage of more competitive rents being offered in different parts of Doha, including the Pearl,” says the report.
Overall rents for residential villas in Qatar have suffered another slight decline in Q4 2010, especially for the larger five-bedroom villas, due to an increased supply of villa compounds. This dynamic was identified in Q3, when Qatar’s villa market was about to undergo a restructure following a new law that restricts villas being used as commercial premises, which has resulted in the prevailing oversupply.
In terms of residential sales, the market declined between 3% and 6% overall with very few transactions taking place in Q4 2010. However since the announcement by FIFA there has been a notable increase in enquiries from private individuals and property investment companies seeking to purchase apartments,” says the report.
Meanwhile, with continued oversupply in the office space sector, rental rates declined between 4% and 10%. Office sales prices stagnated in Q4 2010 due to the lack of sales transactions. Very few investors are interested in buying office space given the current oversupply in the market and only a small number of companies are actually planning on acquiring office space, but are adopting a wait and see attitude for the best price.