By Satish Kanady
DOHA: Qatar’s real estate price index hit an all-time high, surging a record 42 percent this September, compared to the same month last year.
Qatar Central Bank’s (QCB) quarterly update of the index touched record 253.8 points in the month, rising much higher than Qatar’s pre-Asian games levels of 192.2 points, and is up from 178.6 percent recorded a year ago.
The index shows that real estate prices are up 10 percent higher on quarter-on-quarter and 5 percent higher on month-on-month basis.
The QCB index that tracks the country’s real estate prices has been steadily rising throughout this year sans May, when the index fell marginally to 213.8 points from April’s 216 points. The prices, however, rebounded by hitting 230.6 points, or 7.8 percent, up in June.
Data available from the Ministry of Justice suggests high land value is the main driver of overall real estate prices in Qatar. For instance, the month of March witnessed land transactions worth an approximate QR2.8bn making an estimated 67 percent of overall transactions.
The Ministry’s weekly transaction data for September shows steady increase in the transaction value. The transaction value between August 31 and September 4 recorded QR431m.
The value further rose to QR684m for the next week before jumping to QR831m in the following week.
The transaction value jumped to a whopping QR1.49bn during the week ended October 2, 2014.
The outlook for Qatar’s real estate sector has been projected as ‘strong’ by various market analysts. Investments in Qatar’s real estate sector are set to increase in the coming months, Al Asmakh noted in its quarterly report on Qatar’s real estate sector.
QInvest, Qatar’s leading investment bank, said on Monday it has witnessed a marked growth of investor interest in the real estate sector across the region. Craig Cowie, QInvest’s Head of Principal Investment and Real Estate Investment & Advisory, said the bank has closed several real estate transactions this year with a combined value total of $1.8bn.
According to the QCB data, real estate sector accounts for highest share of bank credit in Qatar, after public sector institutions. However, the central bank’s latest financial stability report noted the credit to real estate sector was marginally down by 0.2 percent during the year 2013, from a high 12.3 percent recorded during 2011-12.
But the performance of real estate stocks in Qatar Exchange (QE) was not matching the central bank’s real estate price index. In September, when the prices hit all-time high, the real estate sectoral index on the local bourse fell by 0.83 percent. The sector edged 0.48 percent up yesterday. Barring one, all the real estate stocks were up.
According to Ventures ONSITE, a leading Mena construction project tracker, the value of new infrastructure projects in GCC is expected to surge 77.8 percent year-on-year to $ 86bn in 2014. The value of new projects in Qatar and the UAE would rise significantly to $26.2bn and $15.8bn, respectively, in 2014 from just $9.4bn and less than $3bn in 2013.
The Global Investment House (GIH) in its GCC construction sector analysis for the month of September 2014 noted the region’s construction market is valued at $2.5 trillion.
Saudi Arabia continues to enjoy the highest market share of 44.3 percent, with projects valued at $1.1 trillion. The UAE holds the second-highest share at 30.3 percent, with project value totaling $717.7bn, whereas Qatar has projects worth $270.1bn, accounting for 11.2 percent of the total construction market.
The Peninsula
