DOHA: Real estate market operators expect escalating land prices to stabilise by year-end due to what they say is their saturation after witnessing record highs.
Land prices have risen almost 52 percent this year. However, once stability returns to the market, the prices will continue to increase due to the mega development projects going on, albeit gradually.
House rents can also be expected to stabilise following stable land prices, said Mansoor Al Mansoor, a real estate expert.
“These are the highest land prices we are presently seeing,” he added.
Due to rising land rates, the cost of construction has increased almost 30 percent, negatively impacting the rental market, both residential and commercial, he said.
“However, as land prices stabilise, we hope that house rent increases may be restricted to within the 10 percent range by this year-end and next year.”
Osama Waiz, another real estate expert, said he saw nothing unusual in land prices going up due to rising demand.
“Like everything else, land rates are also a factor of supply and demand. Since demand for land has been rising, so have its rates,” he said.
Demand for more housing stocks, in particular, has been putting pressure on land. And since developed land is scarce, it is natural for their prices to soar.
“An effective way to ensure that land rates are checked so they do not negatively impact house and commercial rents is to make more developed land available on the outskirts of Doha, in particular,” Al Sharq quoted an expert as saying.
Official data suggest that real estate transactions totalled a record QR25.9bn ($7.11bn) in the first half of this year, raising the possibility that yearly transaction value may cross the QR50bn-mark by this year-end.
The transaction value of QR25.9bn in the first half of this year shows a growth of 19.3 percent over the same period last year.
The value of real estate deals totalled QR21.7bn in the first half of 2013, according to official figures.
Rents (clubbed with energy and fuel in the Consumer Price Index basket) went up by 6.9 percent in the second quarter of this year.
The Peninsula
